Former Finance Minister Dr Mohammed Amin Adam has questioned the sustainability of the government’s GH¢2-per-litre relief on diesel, arguing that other levies and exchange-rate pressures have significantly reduced its impact.
Dr Amin Adam, the Member of Parliament for Karaga and Ranking Member on Parliament’s Finance Committee, said the intervention was temporary and relied partly on reductions in margins available to petroleum-sector institutions.
His comments come amid continued increases in fuel prices, with diesel reported at between GH¢17.55 and GH¢18.99 per litre at some outlets despite the relief.
According to Dr Amin Adam, the intervention has effectively been weakened by a GH¢1-per-litre levy introduced on fuel. He also pointed to higher levies on fuel oil, which he said had increased costs for industries and power producers.
He further attributed part of the pressure to the depreciation of the cedi, which he said had fallen by 12 per cent against the US dollar so far this year.
“These are the reasons fuel prices are still very high in spite of the temporary relief,” he said.
Dr Amin Adam described the measure as “quasi-fiscal”, arguing that the reduction was being absorbed through the margins of institutions including the Bulk Oil Storage and Transportation Company (BOST) and the Unified Petroleum Price Fund (UPPF).
He said prolonged reliance on such an approach could affect the financial resilience of institutions within the petroleum sector.
The former Finance Minister is instead advocating a broader review of petroleum taxes and levies, including reconsideration of recent increases.
He contrasted the current intervention with measures he said were implemented by the previous New Patriotic Party (NPP) administration, including the abolition of the excise tax on fuel and reductions in the Special Petroleum Tax.
He also cited the conversion of the Special Petroleum Tax from an ad valorem tax to a specific tax and periods when the Price Stabilisation and Recovery Levy was zero-rated.
Dr Amin Adam further pointed to the Gold for Oil programme, describing it as a major intervention that, according to him, helped bring fuel prices down from above GH¢20 to about GH¢11 per litre at certain points.
He argued that several of the measures introduced under the previous administration were supported by legislation, with their fiscal cost absorbed through the national budget rather than petroleum-sector institutions.
The current debate comes against a backdrop of rising international petroleum prices and exchange-rate movements. The Chamber of Oil Marketing Companies recently projected further increases in petrol and diesel prices, while noting that the existing GH¢2 diesel intervention would cushion consumers against part of the increase.
Dr Amin Adam is therefore calling for a more comprehensive response to fuel-price pressures rather than relying solely on the temporary diesel reduction.
