GRi Business, Economics &Finance 20 –
01 - 2003
Adjust to petroleum
price increases
Petrol queues
vanish after price increases
Drivers refuse to
accept 30 percent fare increase
The Ghanaian Times reported on
Saturday that the new fares were agreed between the GRTCC and the Ministries of
Road and Transport and Energy. The new fares come after Friday's fuel price
hikes that saw the price of premium petrol climbing by 90.4 per cent from
10,500 cedis a gallon to 20,000 cedis.
The Minister of Energy, Mr
Albert Kan-Dappah said diesel and kerosene are each
to sell at 17,500 cedis a gallon marine fuel and pre-mix fuel would each sell
at 16,000 cedis a gallon an LPG gas is now 3,800 cedis per kilogramme.
Senior Minister Joseph Henry
Mensah, who also addressed the press conference at which the new petroleum
prices were announced, said the panic buying of fuel must now stop.
However, many petrol stations
are still dry. Petrol remains scarce while few stations are selling diesel. A
manager of one station in Accra told the Ghana News Agency (GNA) that their
first supplies in nine days arrived only last Thursday and they have since sold
everything out.
Many taxi and tro-tro driver are charging arbitrary fares as details of
the new fares are yet to be released. The fares being charged are from 45
percent upwards. There are still many commuters along the roads waiting for
transport to their destinations.
Fuel shortages got higher from
the middle of the week as speculation of an imminent huge increase in the
prices of petroleum prices heightened. Government officials blamed fuel dealers
for hoarding to reap a windfall on new prices because the Tema Oil Refinery
(TOR) was pumping out normal supplies, but the dealers said they just did not
have the fuel to sell.
The new prices have been
received with mixed reactions. While there is a general agreement that prices
have to go up, many commuters consider the price hike too high.
"The government should have
graduated the increase to minimise the effect on the pubic," said one
commuter, who criticised the government for not adhering to the automatic price
formula published in June 2001.
"I am not saying prices
should not go up. But they have visited this big jump on us and it is going to
throw our budget out of control," he stated.
Senior Minister, Mensah noted on
Friday that the whole economy runs on fuel and any adjustment in prices affects
all aspects of life.
He said successive governments
had out of genuine concern about the impact of high fuel prices on the people
been subsidising the prices, but added that someone had to pay.
"When governments fail to
adjust the prices (upwards), we are happy but somebody has to pay. If we had
taken that money (subsidy) from people who buy petrol, government need not have
to pay. That could have gone to do something else like providing social
services," he noted.
Mensah said the government had
decided to ask the consumer to pay the real price of petroleum products adding
"That is the only sound principle on which we can have the business run.
That is the central issue. It is not the (TOR) debt. It is the cost."
The Senior Minister noted that
the price of fuel would no longer be for the government to decide, but the
market, saying, "It should not be a political decision, but a market
decision."
Mensah disclosed that salaries
were expected to go up by 20 per cent soon while mass transportation would be
accelerated. TOR's debt as at the end of December
last year has been put at 4.5 trillion cedis and Mr Kan-Dapaah
said about 500 billion cedis had accumulated since the government came to
power.
To ensure effective
implementation of the policy recommendations, government has decided that the
National Petroleum Tender Board (NPTB) would be given the independent
responsibility to set the maximum allowable ex-refinery price and integrated
margin on products on a quarterly basis.
Oil marketing companies would be
required to erect billboards to visibly display their prices, adding that future
price changes would be "announced" through the billboards.
To enhance the efficiency of the
petroleum sector and avert the financial collapse of TOR, with severe
implications for the banking system, the petroleum sector must be restructured
in terms of pricing and participation of the private sector.
The government would open up the
refinery business to private sector participation and competition. Kan-Dapaah said the government had decided the immediate
implementation of the automatic price adjustment formula based on full-recovery
and the setting of an initial maximum integrated margin of five US cents for
the oil sector.
The Minister said 10 large
volume buses are being cleared from Tema harbour and would be available on the
road on Monday, 50 completed buses would be introduced by Wednesday, 200
Italian buses were being delivered with the first batch expected by
mid-February, 250 buses have been ordered from
He said with
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Adjust to
petroleum price increases
Kumasi (Ashanti Region) 20
January 2003- Ghanaians have been advised to strive to adjust to the increases
in the price of petroleum products and transport fares even though they were
very harsh measures taken by the government.
Alex Sawyer Ativor,
the Asokwa-West National Democratic Congress (NDC)
Chairman who gave the advice said there was no need brooding over the measure
since the government had already announced the increases.
Ativor gave the advice in an
interaction with the Ghana News Agency (GNA) in
He was however, convinced that
increases in prices of petroleum products was not the only means or avenue for
raising revenue to clear the indebtedness of the Tema Oil Refinery (TOR) or
addressing problems of the economy.
Ativor said alternative areas could
have been explored for mobilising such revenue, saying, "as for petroleum
products that should have been the last resort". The NDC chairman
suggested to the government to act swiftly in ushering in the buses for the
public mass transport system to mitigate the problems workers would have to
face in view with the hike in transport fares.
Ativor observed that since government
was not yet ready to increase salaries of workers, the only option to mitigate
the current transport problems of workers would be to ensure that the public
transport system was quickly introduced.
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Petrol
queues vanish after price increases
Aflao (Greater Accra)
A fuel station dealer, who
declined to give his name, told the Ghana News Agency that, though he sold fuel
to car owners in the few days to the announcement of the new fuel prices
"it was true that dealers had petrol but hoarded it".
While some respondents told the
GNA that it would be too early to conclude that fuel smuggling into
Information available indicated
that a gallon of petrol in
A visit to the Aflao lorry station showed that there were fewer travellers
from Aflao to
Operators of car hiring service
have raised their fares from 25,000 cedis per passenger to 50,000 cedis a
passenger. Emmanuel Agbeviade, a car charter service
operator hoped the public would accept the increments. Prices of manufactured
consumer goods and foodstuffs have however, remained the same at the Aflao market.
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Drivers
refuse to accept 30 percent fare increase
Tema (Greater Accra) 20 January
2003-New fuel prices announced on Friday, has slowed down transportation in the
communities and the few that are working, have increased their fares by 100
percent above the old fares.
From Tema community one to Ashaiman, trotro fare has raised
to 1,500 cedis instead of 700 cedis, while community one to
From community one to community four, taxis charge 1,500 cedis instead of 800 cedis, to
community seven, eight and nine. Drivers plying Tema to Accra Circle/Tema
station charge 2,500 cedis instead of the old fare of 1,400 cedis,
Tema to
Some passengers travelling to
Tamale in the Northern Region today had to abandon their journey because the
drivers were charging 120,000 cedis instead of 45,000.
State Transport fares have
however remained 27,000 cedis to
In an interview with the GNA,
Miss Augustina Ahen, a
pawpaw seller from Tema Newtown said the drivers refer passengers to go to the
government to demand their answers to the new fare increases, adding they have
decided not to heed to the 30 percent fare increase across board as announced
by government.
A number of people who decided
to travel had to stop because of the new fares.
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Ho (Volta Region) 20 January-
2003 The fuel price increases announced by government
on Friday came as no surprise to a cross section of the public in Ho, however
the almost 100 percent increase was not anticipated.
A number of people the Ghana
News Agency (GNA) contacted called for at least 50 percent increase in salaries
to take effect from January one.
Michael Ametame,
a public servant said the increases were inevitable and justified to some
extent but expressed worry about its impact on cost of living and inflation.
He called for a corresponding
increase in wages and salaries across the board and should be implemented
immediately. Miss Faustina Dey,
another public servant said increases in wages and salaries should have
preceded the fuel price increases instead of after the fuel hike.
She explained that an
announcement of increases in wages and salaries after the fuel price increases
would more than double general price increases of goods and services.
He expressed pessimism that the
difficult situation arising out of the fuel price increases would aggravate
corruption in the public and civil services unless measures were taken to
increase the purchasing power of workers.
Drivers in Ho have increased
their fares by more than 100 percent. Taxi fares have shot-up from 700 cedis to
1,500.
Fares from Ho to
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