The National Petroleum Authority (NPA) has refuted claims by Ranking Member on the Finance Committee of Parliament, Cassiel Ato Forson, that indicates the NPA is illegally taking the Bulk Oil Storage and Transportation Company Limited (BOST) margin, Fuel Marking Margin, and the Unified Petroleum Pricing Fund (UPPF) levies.
NPA in justifying the collection of these levies, said that, its mandate to collect, charge or receive revenue with respect to the UPPF, BOST and Fuel Marking Margins is derived from the NPA’s Regulations 2012, Legislative Instrument (LI) 2186, passed by Parliament of Ghana. The Authority insisted that it is acting legally as specified in the Prescribed Pricing Formula Regulations 2012. L.I 2186.
This follows a Cassiel Ato Forson’s threats to take action against the NPA for failing to seek parliamentary approval before the collection of the levies. He said these levies had been increased astronomically and illegally, leading to the rampant increase in fuel prices.
“Levies such as BOST margin, UPPF, and fuel marking margin are not governed by any legislation. In fact, since the NPP took office, the BOST margin has been increased by 200%. The UPPF margin has increased by 167%. The fuel marking margin has also increased by 233%”.National Petroleum Authority
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Levies were not just increased in 2021
Countering this allegation, the NPA noted that the levies were not just increased in 2021 but have been increased periodically since 2009 till date, partly due to the increases in the cost of operations over the time and not being illegally increased.
The NPA indicated that the absence of these margins in the price build-up would have hindered the achievement of the objectives for which the margins were introduced into the prescribed petroleum pricing formula. It gave an example that, uniform pricing of petroleum products did not exist until the introduction of the UPPF margin in the 1990’s.
The NPA further explained that, the BOST margin is a margin incorporated in the buildup of petroleum prices used to cover the cost of maintenance and operations of BOST depots across the nation and to undertake its expansion programmes of the depots. It noted that this margin is collected by BOST and not the NPA.
The Fuel Marking Margin, according to NPA, is also incorporated to pay for the marking of the products to prevent tax revenue loss, smuggling and adulteration of petroleum products.
“Regulations of the LI 2186 determines how to review the prescribed petroleum pricing formula, which states that the pricing formula shall include these margins and the Authority shall indicate these margins to take care of the intended cost above accordingly”.National Petroleum Authority
The NPA emphasized that these margins are purely based on the cost of undertaking for the prescribed activities and not for any other reason.
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