NEWS & REPORT

Ghana gov’t to remove fuel subsidy

Dr. Dufuor, Finance & Economy

Petroleum prices are likely to be increased by the end of the month or in January, because of the growing expenditure on fuel subsidy by the government, industry experts have said.

Currently, the government has accumulated a total debt of about $222 million from subsidising petroleum products this year which is becoming a burden.

The government is therefore, considering removing the subsidy so that consumers will pay the full cost of the products, a government source told the Ghanaian Times in an interview.

It said what had prompted the decision to increase prices was that the government was expected to spend an estimated $45 million in subsidizing the products this month alone.

The source spoke about a stalemate between the Ministry of Finance and Economic Planning and the Ministry of Energy as to when the increase should be implemented.

While the finance ministry is of the view that the increase must be implemented immediately in order not to derail the economy, the ministry of energy says it needs time to come out with interventions to mitigate any social and economic impact.

Explaining issues further, the source said the government went into hedging on crude in January this year to help stabilise petroleum pricing.

Source: Ghanaian Times