The Chamber of Oil Marketing Companies (COMAC) in Ghana is advocating for a freeze on fuel taxes and levies to alleviate pressure on consumers as global oil prices continue to rise. According to COMAC's Chief Executive Officer, Dr. Riverson Oppong, reducing the tax burden could provide a more sustainable way to cushion consumers from increasing fuel prices. This appeal comes as the government continues to subsidize diesel under the Uniform Pricing Policy Fund.
Dr. Oppong emphasized that the government's intervention through the Uniform Pricing Policy Fund ensures that fuel prices remain uniform across different locations in Ghana. He clarified that this fund does not directly result in a loss of government revenue but rather is a form of government intervention to stabilize fuel prices. The fund guarantees that consumers pay the same price for fuel regardless of where they purchase it in the country.
The real pressure on government finances, according to Dr. Oppong, comes from the taxes and levies imposed on petroleum products. He stressed that this is distinct from government revenue and constitutes a significant subsidy. Dr. Oppong has renewed his call for the government to temporarily freeze some fuel taxes to ease pressure on consumers and businesses, citing concerns about the sustainability of the downstream petroleum industry.
Dr. Oppong welcomed the government's current intervention to cushion consumers but suggested that more could be done through adjustments to the tax regime. He proposed that the government consider redirecting some of the additional revenue from crude oil production to support the downstream sector. As Ghana is an oil-producing country, Dr. Oppong argued that redirecting unexpected gains from higher crude oil revenues could help mitigate the challenges faced by the downstream sector.
The COMAC CEO's position is driven by concerns about the long-term viability of the downstream petroleum industry. He expressed his commitment to ensuring the industry's stability, stating that any measures that could bring operations to a halt are undesirable. Dr. Oppong also suggested a dialogue between the government and stakeholders to explore ways of sharing extra profits from upstream oil production to support the downstream sector.
Dr. Oppong highlighted the disparity between the upstream and downstream sectors, noting that while the upstream sector benefits from higher crude oil revenues, the downstream sector faces challenges. He proposed that the government could use some of the additional revenue to support the downstream sector, thereby bridging the gap between the two sectors. This approach, he believes, could help stabilize fuel prices and alleviate pressure on consumers.
The call from COMAC for a freeze on fuel taxes comes amid predictions of rising fuel and LPG prices. Other industry players, such as COPEC, have also forecast increases in fuel prices. The government's response to these concerns and the implementation of measures to stabilize fuel prices will be crucial in determining the future trajectory of the downstream petroleum industry in Ghana.
Key points
- COMAC is calling for a freeze on fuel taxes to ease pressure on consumers amid rising global oil prices.
- The Chamber of Oil Marketing Companies suggests that redirecting some crude oil revenue could support the downstream sector.
- Dr. Riverson Oppong emphasizes the need for a sustainable approach to cushion consumers from increasing fuel prices.
