30 December 2011, Sweetcrude, ACCRA – Ghana has cut fuel subsidies, citing increase in crude oil prices and the depreciation of the Ghana cedi currency as reasons.
Chief Executive Officer of Ghana’s National Petroleum Authority (GNPA), Alex Mould, disclosed this in a statement on Thursday.
Reuters reports that Ghana, which joined the club of oil producers in West Africa last year, has come under increased pressure from the International Monetary Fund (IMF) to remove the fuel subsidies.
The IMF has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but rather promote corruption and smuggling. The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.
Mould said the cumulative effect of the rise in crude oil prices this year and the about 5.7 per cent depreciation of the cedi meant a 25 per cent increase in cedi terms in the cost of procuring crude oil and petroleum products since January.
Mould said Ghana had spent about 450 million cedis (N 44,725,608,210.76) on fuel subsidies in 2011.
The price change effective from December 29, will see the cost of Liquefied Petroleum Gas (cooking gas) increase by 30 per cent while petrol and diesel will go up 15 per cent at pump.
Mould said the GNPA would be monitoring crude oil prices and will not to increase or decrease pump prices if the average crude price stay within the $107-110 per barrel range.
Brent crude rose 4 cents to $107.60 a barrel by 0933 GMT on Thursday after falling nearly $2 the day before, while the Ghana cedi was trading at 1.6370/95 to the US dollar.
Ghana’s Minister for Finance Kwabena Duffour said the removal of subsidies would have a positive impact on Ghana’s economy.
By this increase, according to the NPA, the price of petrol to GNp175.48 (N184.972) per litre; diesel is now GHp 177.09 per litre ((N186.668); while LPG will go up by 30 per cent at GHp 136.19 per kilo (N143.765).
This means a 12.5 kg gas cylinder will now sell at GHc17.02 (N1,796.76) while a 14.5 kg cylinder will sell at GHc19.75 (N2,084.96).
The prices of kerosene, premix fuel and Renewable Fuel Oil (RFO) remain unchanged, according to the GNPA.
