Head of Research at COPEC, Benjamin Nsiah, has suggested that when it comes to the issue of pricing, government should look at how best Ghana can refine its own crude.
Mr. Nsiah explained that when the country does this, certain cost elements incurred when importing the crude will not be there.
The Head of Research acknowledged the fact that the international prices and other factors contribute to the prices the nation is currently having to deal with. However, Mr. Nsiah noted that when Ghana begins to refine its own crude, the pricing will be worked on to reduce the burden being placed on the people. “Government should look at how best Ghana can refine its own crude.”
According to Mr. Nsiah, Tema Oil refinery is ready to refine and if there are challenges the sector is facing in terms of retooling or maintaining the refinery, they just have to alternate cost of maintaining it and push money into it.
“Ghana produces 155,000 barrels per day and these barrels, Ghana’s share is let’s say 18 percent. Ghana consumes 90,000 barrels per day. 35 percent of that can be given to Tema Oil Refinery because TOR does about 53,500 barrels a day and that is 53 percent of our daily consumption.”
Benjamin Nsiah
Also commenting on the fuel price hike, Abass Ibrahim Tasunti, Head of Pricing at NPA intimated that the nation needs to understand what goes into the pricing of petroleum products so consumers can know what is driving the increase in prices.
“As a country we are net importer of petroleum products and what that means is that, about 90 percent of the petroleum products we consume is imported.”
Abass Ibrahim Tasunti
Pricing considers importation cost
As such, Mr. Tasunti explained that the pricing formula that is used in Ghana takes into consideration the cost of importing the products into the country. This, he stated, means the country is exposed to the price on the world market.
“As we are aware, petroleum products just like gold and other commodities are global products whose prices are determined by global events or demand and supply factors on the global scene. So, as we are using the import price formula, we will always be exposed to the world market prices which will cause an increase.”
Abass Ibrahim Tasunti
Contributing to the discussion, Research Analyst at the Institute of Energy Security, Fritz Moses, posited that so far as Ghana consumes petroleum products daily, it will have to face the prices on the international market.
“We all understand and appreciate that the international market is responsible for what is happening on the international market. Of course we have seen a consistent rice in the international market from the beginning of this year, throughout to the mid of June.”
Fritz Moses
The Research Analyst then lamented about how the nation has not put in place any robust local mechanism to force prices to remain stable, depreciate or to even reduce locally. He stated that the sector hasn’t made available any local shock absorbers to mitigate impending increase locally as well.
Fritz Moses asserted that since government has been benefitting from the increase in petroleum prices, consumers too should be able to also benefit from that. “Government should look at reducing the tax so that at the down stream level, something could be done for consumers.”
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