Like some observers, Mr. Rockson insists that the Special Petroleum Tax should be scrapped completely.

[contextly_sidebar id=”bVHXW71p9m0DJ6jNYRw5tplRtgOJfPJB”]”When you look through the price build up, it is one of the easiest you can take out because, apart from government earning revenues from that, it doesn’t have any special role to play in the price build up,” he said on Eyewitness News.

Mr. Rockson stated that even after the reductions, Ghanaians will continue to suffer in terms of how much they pay for fuel.

“Fortunately, we have had some reduction over the period but it is woefully insignificant. What is 2 percent going to do to the ordinary consumer when prices are currently at GH¢4.57?The excuse that government will lose revenue is untenable because the ordinary Ghanaian cannot continue to suffer in the name of revenue.”

He argued that the tax was needless because, among other things, government’s crude oil price benchmark at the time it was introduced was $57.5 per barrel but it has since exceeded this benchmark with $60 so “the special petroleum tax does not have a place today in the current system because we don’t have the same problem we had a few years ago.”

Parliament, on Thursday, passed the Special Petroleum Tax Amendment Bill to reduce the levy on petroleum products by two percent.

This was after recent protests against the rising cost of fuel, as well as calls from the Minority NDC MPs, whose government introduced the tax in 2014, for it to be scrapped.

ICU urges patience

The Industrial and Commercial Workers Union (ICU) was more receptive towards the reduction.

Also speaking on Eyewitness News, the ICU’s General Secretary, Solomon Kotei, remarked that “any relief that comes by way of price drops, industry obviously gets some relief in terms of what they also use the fuel for.”

Although his union had called for the scrapping of the tax, Mr. Kotei said he was satisfied because the government was on the right trajectory.

“We were praying and pushing for a total scrap. But if we didn’t get the scrap and this is the second time running government is reducing the same special petroleum tax by and additional 2 percent, we think gradually, that element will go out of the price programme and all Ghanaians will get that feel at the appropriate time… It goes to prove that our agitation and commentary on the issues is right.”

Background

The Special Petroleum Tax Law was passed in 2014 as part of tax measures adopted by the government at the time to increase revenue generation and improve efficiency on revenue collection from petroleum products.

The Tax was initially set at 17.5%, but was reviewed downwards by 2.5 percent in the 2017 budget.

The law authorises the Ghana Revenue Authority to collect the tax, which would be paid into the Consolidated Fund.

The petroleum products to be affected, according to the Finance Ministry include petrol, diesel, liquefied petroleum gas, natural gas and kerosene.

–

By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post IES slams ‘insignificant’ 2% Special Petroleum Tax reduction appeared first on Citi 97.3 FM - Relevant Radio. Always.

The demonstration, which is being organized by the Chamber of Petroleum Consumers (COPEC) in collaboration with the Industrial and Commercial Workers Union (ICU), is to force the government to reduce taxes on petroleum products.

[contextly_sidebar id=”sRhl8OiuMsOBq9jliAEebIMeuKpasfP5″]Currently, a litre of both petrol and diesel, goes for GHc4.62 at some major fuel stations.

This is despite assurances from the National Petroleum Authority (NPA) that prices will remain fairly stable at the pumps.

Speaking to Citi News earlier, the Executive Director of COPEC, Duncan Amoah, called on the government to review prices of petroleum products.

“We are paying close to $5 in order to be able to get petrol to your tank. That clearly is not helping anything. We understand very well that some of the taxes were introduced as windfall taxes at the time that world market prices had dropped so low and Ghana needed a little more revenue in order to be able to cushion the world market prices that have gone down.”

“Today, the same dynamics are not at play. Unfortunately, the taxes that were introduced which should have gone by now, are still all in place. Ghana selling petrol above 20 cedis and it is still going up, it cannot be sustained. We need an immediate review of the price build up. We need some reduction. We need some stability in order to plan our spending on petroleum products in the country.”

IES predicts 2% price increase

The Institute of Energy Security (IES), had earlier predicted that prices of fuel may go up by 2 percent in the first pricing window in February, between February 2, 2018, and February 15, 2018.

The IES further attributed the development to the constant rise in crude oil prices which is currently selling at 69 dollars per barrel on the international market, among other factors.

–

By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post COPEC, ICU to demonstrate today over fuel price hikes appeared first on Citi 97.3 FM - Relevant Radio. Always.

Currently, data from the National Petroleum Authority shows that there are about 10 different kinds of taxes and levies on petroleum products.

Speaking on the Citi Breakfast show, a principal research analyst at IES, Richmond Rockson, argued that the adverse effect of the increment in fuel prices on consumers could be minimal if government scraps some of the taxes.

[contextly_sidebar id=”KakJOmtQ4k59VJ0ZF7r4i7EY8UqIstNb”]“The first thing that should go is the special petroleum tax. I don’t think that there is any need for government to impose 15 percent there. There is no point in that. Some of them can also be reviewed; I don’t see why the road fund should be 40 pesewas, it’s too much. The price stabilization and recovery levy must also go, especially when government is passing the cost on to consumers. There is no point keeping that in there as well,” he added.

Current figures from some fuel stations show that, prices of petrol and diesel have hit an all-year high, with petrol selling at an average of GHc4.29 at the pumps, and diesel going for an average of GHc4.23 per litre.

Mr. Rockson attributed the increment on the surge in crude prices on the international market as well as the depreciation of the Ghanaian currency – the cedi.

“When it comes to fuel pricing we know that there are a number of indicators that we all look at – one of the critical things that we look out for is our cedi, thus the exchange rate as compared to the dollar. Over the period, the cedi has been depreciating marginally and from May till date – ten consecutive windows—it’s only one [window] that we had a stable currency. In all the other nine, the cedi depreciated and we’ve been mentioning this every time. As we speak, the average exchange rate is 4.48 pesewes from a previous average of 4.44 pesewes, and this is really troubling because the effect it has on fuel pricing is that, it’s going to push prices up instead of pushing it down.”

He said “crude oil prices have also surged” adding that “as we speak, we are doing about 55 dollars from a previous average of 52 dollars per barrel, a depreciation of about 3%.”

“For a benchmark for finished products for gasoline and gas oil, they’ve also gone up, in this particular window they went up by 14% for gasoline and for gas oil it went up by 8%. This is what has accounted for the increment in this month [September],” Mr. Rockson explained.

–

By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post Scrap taxes on fuel to reduce prices – Energy Institute appeared first on Citi 97.3 FM - Relevant Radio. Always.