Ghanaians were ushered into the year 2016 with an unwholesome gift from President John Dramani Mahama with a 27% hike in fuel prices but as consumers brood over the increase and find ways to adjust to the reality, some Members of Parliament and Energy Think tanks are alleging fraud has been visited on the populace by the government.
While the Africa Centre for Energy Policy (ACEP) is accusing the NDC government of double taxation with the introduction of the Special Petroleum Tax, K.T Hammond, the Ranking Member of the Mines and Energy Committee in Parliament is also accusing the National Petroleum Authority of perpetrating fraud on the people of Ghana.
According to KT Hammond, the NPA on the blind side of Parliament and the Ministry of Finance surreptitiously increased fuel prices to 30 percent to the discomfiture of consumers.
He said Parliament had expected no increase in fuel prices at all or even if there will be, it will be marginal due to the introduction of the energy sector levy introduced by the Executive under a Certificate of Urgency.
He therefore could not understand how a figure of 27 per cent hike was announced.
"We didn't know about it. I had no clue. As I understand, there has been a disconnection between the activities at the Ministry of Finance and those at the NPA. The NPA is practicing some fraud on the people of Ghana and I think they would have to be unmasked”, the Adansi Asokwa MP stated.
Some MP’s are also calling on the Speaker of Parliament to summon the Finance Minister to the House to justify the quantum leap in the prices of fuel.
According to the Executive Director of ACEP, Dr. Amin Adam, new taxes imposed by government on petrol and diesel in particular are beyond acceptable levels for developing countries.
At a press conference, the energy think tank disclosed that an IMF survery on ex-pump prices for petroleum products for developing countries range between 22 and 30 percent. But the recent taxes on petroleum products, are more than 40 percent in levies.
ACEP insists that Ghanaians are being punished with a 33 percent increase in petrol prices and 40 percent for diesel while Government says the January 1 adjustment in the prices of petroleum products were between 18 and 28 percent.
Dr Amin Adam, explained that the Bretton-Woods institution conducted a survey in developing countries to ascertain the range of tax shares in ex-pump prices of the commodity which showed a range between 22 and 30 percent.
Amin Adam said in Ghana the tax component on petrol was 28% before the recent levies, however, it is now 41%. For diesel it was 18.7% before the new levies but this has now risen to 41.7%
“We are now way outside the developing circles…Ghanaians are being asked to pay much more….we least expected that Ghana will go outside the developing bracket” he expressed disappointment.
Dr Mohammed Amin Adam, further disclosed that consumers have over paid the TOR debt, explaining that at the time the levy was instituted, the total debt stood at GH¢450 million.
He said by 2009, the total debt had grown to GH¢900 million due to non-application of the revenues to service the debts as well as interest accumulation.
“Our analysis shows that from 2009 and 2015, the total collection from the levy is in excess of GH¢1.9 billion, which effectively amortises the debt assuming an interest rate of 10 per cent and therefore finds it difficult to comprehend why consumers should continue to pay this debt”, he added.
The Center therefore called on the Ministry of Finance to comply with the Tema Oil Refinery (TOR) Debt Recovery Fund Levy Act 2003 (Act 642) by submitting to parliament a comprehensive report on the levy covering 2004 to 2014.
The new fuel price hikes have been heavily criticized by the general public due to the attendant hardships it will bring on the people.
Already commercial drivers are meeting to decide new transport fares to slap on commuters.
Meanwhile, the Employment and Labour Relations Minister, Haruna Iddrisu says increased utility tariffs and some fresh taxes were meant to help President Mahama fulfill his promise to fix Ghana’s cyclical energy crisis once and for all.
His explanation comes after a meeting with Organised Labour pushing for a reduction in the tariffs ended in deadlock.
Justifying the price hikes in utilities Haruna Iddrisu explained that huge outstanding debt of GHC4.5 billion which needed to be settled informed the decision to introduce the new Energy Sector levy which eventually caused an increase in petroleum prices by up to 28%.
Haruna Iddrisu also explained Ghana's increased reliance on thermal energy means government needs money to power thermal plants.
“The country needs 98 million cedis a month to keep those generators running in order to keep the country out of darkness”
He also explained the government is indebted to Electricity Company of Ghana and Volta River Authority and it is hurting the energy distributor and generating companies’ ability to balance their books.
The government, he said, also owes GH¢300million to road contractors some of whom have not been paid for work done more than four years ago.
Some 40 pesewas has been inserted into the Energy Sector Levy per litre of petrol to help government face its debts to contractors head-on.
He said Ghana would sink into a deeper crisis if the government does not take steps to adjust tariffs and introduce taxes.
Organised labour is expected to meet this week to firm a decision on whether to embark on an industrial strike action or a demonstration.
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