The Chamber of Petroleum Consumers Ghana (COPEC), has indicated that, the Price Stabilization and Recovery Levy on the downstream petroleum sector has become ineffective and as a result calling on the President, Nana Addo Dankwa Akufo-Addo, to scrap the levy.
According to the Chamber, the levy no longer serves a purpose since Ghana has deregulated its downstream petroleum sector.
Speaking during a discussion on issues affecting the prospects in the energy sector, the Head of Research and Training Unit at Chamber of Petroleum Consumers-Ghana (COPEC), Benjamin Nsiah intimated that, over the years, the stabilisation levy has not been activated in times of hikes in the price of petroleum products, therefore, making the law ineffective and non-beneficial to ordinary consumers.
He further argued that, during last year’s Christmas festivities, prices started going up and the government of Ghana should have activated the stabilisation levy to cushion consumers since the impact of COVID-19, had affected the finances of many people but that was not the case.
According to Mr. Nsiah, since COVID-19 was normalising and production in the sector started, it affected demand and supply which also affected price of the product at the international market.
Additionally, he noted that, this automatically impacted on Ghana’s petroleum prices.
“We at COPEC have been calling for the scrap of the Stabilization Levy because, now we have a deregulated market and it means that our petroleum prices should be able to determine the price for themselves.”
Mr. Nsiah also argued that per the deregulated policy in operation in Ghana, it does not mean that any time there is a problem with prices of petroleum products, either suppliers or consumers could just advocate triggering of the stabilisation levy to cushion either of them.
“Based on demand and supply, we should be able to determine prices of products so no one or institution sits somewhere and thinks that because we are in a deregulated market, there is a levy called price stabilisation levy so any time we could cushion petroleum suppliers or petroleum consumers, depending on how you look at it with that particular levy.”
During the Christmas period, prices of petroleum products in Ghana were increased marginally at the pumps and this saw consumers complaining about how difficult it was for them to buy the products.
It was for this reason that the Price Stabilization and Recovery Levy was activated to cushion ordinary consumers in such circumstances but this was not effective.
COPEC commenting on this, indicated that, the time is due for Ghana to look at that particular price law because it has not been used effectively over the years.
The Price Stabilisation and Recovery Levy is a levy imposed under the Energy Sector Levy Act (ESLA), to serve as a major source of subsidising the various petroleum products, especially for premix fuel and residual fuel in Ghana.
The Levy, as imposed by the Act, is derived from the sale of petrol, diesel, marine gas oil, residual fuel oil, liquefied petroleum gas, kerosene, and electricity. The agencies with responsibility for the collection are the Ghana Revenue Authority (GRA), National Petroleum Authority (NPA), Electricity Company of Ghana (ECG), Northern Electricity Distribution Company (NEDCO), and the Volta River Authority (VRA).