For How Long Shall We Continue this petrol politics?

Alas the recent uncertainty surrounding the pricing of petroleum products appears being resolved. The NDC led government which won the 2008 elections on the back of some populist promises on petroleum pricing has demonstrated some level of boldness. The new government had tied itself by some of its populist campaign messages to the Ghanaian public and voters that petrol could be sold for less than was being sold at the time (Dec. 2008 GHC3.80). It also campaigned that the cost was unbearable for Ghanaians and promised to reduce it drastically when voted into office. But only five months into the new administration, a gallon of petrol is selling for GHC5.00 while a barrel of crude oil is selling for US$68!

If this is not a déjà vu then I don’t know what else it is. The NPP and then candidate Kufuor in 2000 campaigned that a gallon of petrol sold at GHC0.65 was unbearable and could be reduced. Within six months of President Kufuor’s administration in 2001, it had repented of its campaign promise on petrol pricing and admitted that petrol had to be sold at realistic market prices. Within the same period the price jumped from GHC0.65 to GHC1.05. Indeed, it was under the NPP that Ghana witnessed deregulation of the petroleum sector. In the last year of President Kufuor’s tenure, a gallon of petrol at one time sold for GHC5.60 when a barrel of crude oil sold for US$147!

While most NPP sympathizers would want to exploit and capitalize on the new increase in petrol prices to our political advantage, I beg to differ for these reasons;

• Ghana does not produce oil; it is a net importer of crude oil

• It pays for the imports with the dollar currency even though it might enjoy some days of credit

• The cedi is unstable against the dollar and the value at the time of lifting is always different from what be pertaining when payment is to be made.

• Ghana would have to borrow from the banks or increase taxes to pay for the imports to ensure the availability of petrol to the public.

• We don’t want to experience queue’s at our petrol stations

• Any policy that seems to push for the continuous subsidy on petrol is an explicit push for increased government indebtedness to the lending banks or increase in taxes, push for a collapse of such lending banks as debt would become unsustainable, push for increase in inflation and interest rates, push for under-recovery in the sector which would invariably lead to petrol smuggling to neighboring countries where prices are higher and more realistic and then a flourishing local black market where products would be bought at cut throat prices since the products which are essential would be artificially absent from the petrol stations.

While the NDC might have benefited from politicking with the pricing of petrol in the last election, the truth is that our politics suffer from insincere campaigns if we allow the cycle to continue. We (politicians) stand the risk of loosing the trust of the electorate because they will believe that politicians come to them with lies seeking for their votes but fail to be accountable to these promises and commitments when they win power. I caution the NPP not to go the populist way because I strongly feel it will not work again.

Since the introduction of the deregulation, can anyone tell me when last Ghanaians experienced queues at the petrol stations? It might also be interesting to know who does the pricing; Ministry of Energy or National Petroleum Authority (NPA)? Against the gains of Political expediency President Kufuor was very hesitant in interfering with the pricing mechanism when the pressure started mounting in January, 2008. Imagine the amount of under-recovery and debt that would have been added to the huge stock pile if he had bowed to the pressure from the start of January, 2008 when a barrel of crude oil sold for less than US$100 compared to when he intervened in the NPA pricing when a barrel of crude sold for US$147! The NDC would be caught up in the mess of its own promises and the Ghanaian voter grows wiser after every election!

Nana Attobrah Quaicoe