Prices of petroleum products at the pumps could go up by as much 30 percent next month. Joy Business sources say the increase has become necessary because of the rising price of crude oil on the world market.
Officials indicate the world crude price is expected to influence the pump price by as much as 25 percent with the Tema Oil Refinery debt recovery levy recently approved by Parliament contributing an additional 5 percent.
Joy Business’ George Wiafe reports that the group to feel the pinch of the increase in the TOR debt recovery levy are consumers of diesel and petrol. The levy went up from 2 pesewas per liter to 8 pesewas.
The levy alone should see the price of petrol go up from 1.16 Ghana cedis to 1.22 Ghana cedis, an increase of 27 pesewas on a gallon of petrol. A gallon of diesel is also expected to go up by the same margin to 5 Ghana cedis 58 pesewas.
In addition to the TOR levy the NPA is said to be also closely observing the world crude price which is currently around 94 dollars. Meanwhile consumers are yet to benefit from the hedging policy.
At a hedge of 87 dollars at a cost of 7 dollars per barrel, the public can only feel the impact if the price goes beyond the 94 dollar a barrel mark. It is however important to note that any planned price increase could be suspended should government decide to subsidize as it has done a number of times in 2010, though it comes with its own challenges.
One major reason why government may want to subsidize is so it could keep inflation in check, as any substantial increase in the price of petroleum products will trigger a corresponding increase in transport fares and ultimately an increase in the price of goods and services.
Joy Business has also learnt that even though in principle government has made known its intention to absorb the increases, it failed to make the necessary payments to bulk oil distributors and oil trading companies.
Sources close to the NPA say the increment has also become imminent because the last such increase was about a year and a half ago when 75 dollars was used in the fuel price build-up.
Source: Joy Business/Ghana