Oil and energy strategist, Dr. Yussif Sulemana has intimated that, government should reactivate the various downstream institutions in Ghana to help cushion the impact of the increase in petroleum prices on consumers.
Speaking with the Vaultz News on the measures government can take up to help consumers with regards to the increase in prices of petroleum products, he posited that government must take keen interest in reviving specifically Bulk Oil Storage and Transportation (BOST) and the Tema Oil Refinery (TOR).
This, he said, will reduce the impact of the exchange rates of petroleum prices as well remove unnecessary taxes that come with it to make fuel more affordable to local consumers.
“TOR and BOST; these institutions are very critical. If you look way back, even when Ghana did not have crude oil, TOR was very vibrant, BOST was doing quite well. And after 10 years of extracting crude oil, these institutions are rather going down in terms of their efficiency and the amount of time that they have been onstream.”
He noted also that, if these institutions are revived, specifically BOST in this case, some strategic reserves will be released into the market whenever there is a short fall. He said if there are lots of reserves, that will also grant the nation energy security.
He mentioned the fact that, if TOR is on its feet and made vibrant and efficient, which in turn will make the nation have control over crude oil and the raw materials, then the consumer will be supported in a way.
“We are not saying that TOR will produce and refine crude oil and have prices that will not be at par with the international bench mark, No. But, the fact that we have a refinery, the fact that we do not need to pay extra money to import; the taxes that are involved and then the kind of security that are involved when a refinery is running.”
Additionally, he averred that if these two institutions are on their feet, the nation will have some steady stand in the international market and they will as well serve as stabilizers to Ghana.
Dr. Sulemana also indicated that, three components are accountable for the petroleum price build up at the various pumps, that is, the prevailing pricing in the international market, the exchange rate and the taxes involved.
He averred that nothing can be done about the international market prices and the exchange but with taxes, something can be done to help cushion prices for consumers. He then explained that, reactivating the taxes will bring about some form of solution.
“Taxes and levies, we can say form about closer to 50% of what the consumer pays at the pump. Most of these taxes, we can say are nuisance. They are nuisance to the extent that, why the taxes were set up and whether we are benefitting from these taxes that were set up, we don’t know.
“For instance, the price stabilizing levy by now should have been reactivated to be able to have some cushion in the market. It looks like we are not seeing any impact of that, so then, why is it out there?”
He reiterated the fact that, one way to cushion the prices is to revisit the taxes, because this is the only thing the authorities can do to forestall the price fluctuations.
“I define nuisance taxes as ones that are paid but we don’t see any impact; one of them is the price stabilization levy. So, it should be reactivated or taken away all together.”
He posited, however, that, revisiting the taxes will not provide a lasting solution to resolving the issue of higher fuel prices in the country but strengthening these critical institutions will have a lifelong impact.