Dr Mohammed Amin Adam, the former Finance Minister and Ranking Member of Parliament's Finance Committee, has criticized the governing National Democratic Congress (NDC) over its response to rising fuel prices in Ghana. He argues that similar international market pressures were cited differently when the New Patriotic Party (NPP) was in office. According to Dr Adam, the factors currently being used to explain increases at the fuel pumps, including global petroleum prices, exchange-rate movements, and international market conditions, were also present during the NPP administration.
Dr Amin Adam made these comments in a Facebook post on Sunday, September 27. He recalled the political debate over fuel prices in 2021, when the NDC, then in opposition, attributed increases to what it described as poor economic management, taxes, and the depreciation of the cedi. At the time, Ghana was experiencing the effects of a global energy shock following the reopening of economies after the COVID-19 pandemic. Data from the US Energy Information Administration showed that Brent crude rose from about $50 per barrel at the beginning of 2021 to approximately $86 by late October that year.
The International Monetary Fund reported in October 2021 that Brent crude had crossed $85 per barrel amid tight energy supplies and rising global energy costs. Dr Amin Adam noted that Ghana, as a net importer of refined petroleum products, is exposed to international price movements and exchange-rate changes. He stated that the mechanism through which international prices and exchange rates influence domestic fuel costs existed under the previous NPP administration and remains applicable under the current NDC government.
Dr Amin Adam defended measures implemented by the NPP administration to cushion consumers from rising fuel costs. He cited the abolition of the excise tax on fuel, reductions in the Special Petroleum Tax, changes to the tax structure, and the Gold for Oil programme as interventions that provided relief to consumers. In contrast, he described the current government's intervention on diesel, which includes a GH¢2 per litre support, as temporary. He also argued that a GH¢1 per litre levy introduced by the government had offset part of the relief.
The former Finance Minister attributed part of the current pressure at the pumps to movements in the exchange rate. He called for broader measures to address fuel prices, including a review or suspension of recent increases in petroleum-related taxes. Dr Amin Adam's comments come amid continued increases in fuel prices. In the second pricing window of September, COPEC projected petrol at GH¢16.26 per litre and diesel at GH¢19.07 per litre, citing increases in international crude and refined petroleum product prices.
Current pump prices vary among Oil Marketing Companies, with GOIL listing petrol at GH¢16.64 and diesel at GH¢18.46 per litre from September 17. Dr Amin Adam's criticism of the NDC's response to fuel price increases highlights the ongoing debate over the management of Ghana's economy. The issue has significant implications for consumers and industries that rely on fuel.
The fuel price debate is likely to continue in the coming weeks, with stakeholders closely monitoring the government's response to the rising costs. Dr Amin Adam's call for broader measures to address fuel prices may resonate with consumers who are feeling the impact of the increases. The government's ability to balance economic management with consumer relief will be crucial in the coming months.
Key points
- Dr Mohammed Amin Adam criticizes NDC over fuel price explanations.
- Amin Adam cites similar international market pressures during NPP administration.
- The debate over fuel prices has significant implications for Ghana's economy and consumers.
