The Fuel Price Brouhaha

I have over the past few days listened with keen interest the hue and cry about the fuel price increment. As to whether this debate by the politicians is justified must be left in the hands of posterity to judge. My greatest worry is however the intellectual hypocrisy and the distortion of facts that had in recent times characterised the whole discourse. My heart aches when I hear the politician bleeding profusely to make a mountain of a mole hill and would want to politicize anything. Indeed when they are in power, they wear different spectacles and when in opposition, they see everything from the utopian point of view. Amazing huh, such is the political drama and trauma that the ordinary Ghanaian has to endure.

Comrades the word ‘’fuel’’, brings to mind the much trumpeted petroleum deregulation policy which gained prominence on Friday 18th February 2005 with the announcement of new prices for petroleum products by the late Hon. Baah Wiredu when he read the 2005 budget and made the announcement of Government’s decision to deregulate the petroleum sector. In paragraph 298 of the said budget, he said, ‘’the prices of fuel were arrived at on the basis of the existing pricing formula and were designed to realign prices with international prices for crude oil. This was to set the stage for the OMCs to take over the pricing of petroleum products under the supervision of an independent National Petroleum Authority (NPA)’’. It must be significantly stressed that in the reading the 2006 budget on 10th NOVEMBER, the Late Baah Wiredu said that, “After many years of petroleum subsides and attendant losses at the Tema Oil Refinery- estimated at $2.0 billion since 1985-Government decided to implement the policy of deregulation of the petroleum industry, notwithstanding strong political opposition. A deregulation law (The National Petroleum Authority Act, 2005) was presented to Parliament and passed in June 2005. The National Petroleum Authority (NPA) which was subsequently set up in accordance with the law has carried out its mandate, and Petroleum prices have since moved broadly in line with international market. (Page 18, Paragraph 39).

In the 2003 fiscal year, the then Minister of Finance and economic Planning, Hon. Osafo Marfo in reading the budget for the 2003 fiscal year said in paragraph 12 that, ‘’the NPP government is heartened to note that Ghanaians understand that the decisions about petroleum and utility price adjustments are not matters of electioneering campaigns. Rather, they understand that we must make these difficult but necessary decisions now so that future generations do not have to bear intolerable burdens because we knowingly refused to make the hard but correct choices. It is better to conduct democratic politics in an open society that squarely faced up to the economic facts of Ghana’s present and future than to shut our eyes in a falsely cocooned world of denial. The public response to the petroleum sector reforms and price adjustments is a vote of confidence in a government which is fearlessly ready to do the right thing at the right time’’. On 17th January, 2003, petroleum prices were raised by about 95 per cent on average to bring them in line with world market levels. This exorbitant fuel price increment was borne by the ordinary Ghanaian without any protest though government officials were always caught ostensibly in long convoys fuelled by the poor citizens. In January 2001, the exchange value of GH C 0.68= $ 1.00 and as at today, GH C 1.45 = US $ 1.00. The ex pump price for petroleum went up by 64% (the price was increased from 0.64p to GH C 1.05) after the NPP had been in power for ONLY TWO MONTHS. This was not the end of the punishment on the ordinary Ghanaian, they went ahead to increase the fuel price by a further 100%. In that same year, Government slapped on the nation a petroleum tax revenue of C 646.6 billion (GH C 6.46 million). Those were the days when the nation was disgraced into being declared a Highly Indebted nation. The 2002 budget increased this tax burden by 72% to C1.118 trillion (C 111.8 million). Such was the rate at which the tax payer suffered in the hands of the NPP government. Before taking office in 2001, one gallon of petroleum was sold at approximately 0.64p and this was Ex- President Kufuor’s government- a man who prior to the 2000 elections was jumping from one rally to the other with his cronies carrying gallons and saying the price of petroleum was too expensive when the international crude oil price was sold at $ 36. Indeed, he promised us “A POSITIVE CHANGE” and this was at the time when the adverse international economic in the world market was not favourable to our major import and export commodities of gold, cocoa, crude oil, etc. As a matter of fact, the market price of cocoa dropped by 50% from US $1600 per tonne in 1998 to US $800. Gold price declined from about US $450 an ounce in 1998 to under US $290 in 1999. Crude oil prices rose suddenly from US $11 per barrel in 1998 to US $35 per barrel in 1999, an increase of over 300%. Ghanaians then believed the promise of the NPP to reduce the fuel price when elected into office. We did vote for the NPP only to realise that this promise was only a sham and a prank. They ridiculed all of us by ensuring that Ghana was blacklisted as a Highly Indebted Poor Country (HIPC). Things became so difficult that they told as to tighten our belts. The irony of this political hypocrisy is that when Ghanaians were painfully enduring, the Ex-President J.A. Kufuor found it more convenient to spend about US $46000 of the tax Payers money to buy a gold medal to award himself. The least said about the total cost of the whole exercise the better since that would only deepen the PAINS we feel towards him and his cronies. To add insult to injuries, his Information Minister, Mr. Asamoah Boateng came out boldly to tell us to take mango, roasted corn, “kokonte” etc, as breakfast; this was at the dawn of the time the economic hardship hard reached its fever point and the time that saw ASABEE also receiving EX- PRESIDENT KUFUOR’S AWARD. This profligate profile of the former administration is just the tip of the ice berg. When Ghanaians were tightening their belts, they (17 former government officials) could raise as much as C 250 million as filing fee for their presidential primary. I was not surprised about this turn of events since the EX- PRESIDENT KUFUOR had cheapened the presidency and anyone thought he could be a president. May be they found the office so attractive because of his gold medal or because of the famous ESSEKU corruption allegation. When the EX- PRESIDENT KUFUOR’S brother, Dr. Addo Kufuor wanted to be a president and he Mr. Kufuor advised him not to do so, he Dr. Addo Kufuor sharply rebutted and said, if “you Kufuor of all people can be a president, how much more me Dr. Addo Kufuor’’. This infamous statement was not only an insult to his brother but the Presidency as well. Indeed, as a Ghanaian who voted for the EX- PRESIDENT, I felt so insulted. The BBC described the ¬ EX- PRESIDENT as having decorated himself as 50 CENT (the American Rapper who ostensibly wears necklaces ear rings so as to give himself a funny look) and this description was put on the internet for global consumption.

Fellow Ghanaians, contrary to their criticism on the then fuel price of 0.64p as being too expensive, they left a petroleum price legacy of approximately GH C 4.00. It must therefore be on record that the NPP GOVERNMENT increased petroleum prices by approximately 700% in 8 years. As a matter of fact, the petroleum price was as high as GH C 4.82. This was the burden on the ordinary Ghanaian till few days after 7th December, 2008 when due to electoral conveniences, they reduced the fuel price by 17%. Comrades, I was shuttered to listen to the press conference of the Minority in Parliament on Friday, 13th of June, 2009. In the said event, the Minority Leader said, “the recent 30 percent increase in fuel prices by government was a clear case of betrayal of faith and trust, stressing that the people of Ghana have been fooled and hoodwinked by Professor Atta Mills and his party into giving them the mandate to rule.” This statement I do not only find to be malicious and mischievous but lacked decorum expected from someone who is titled as Honourable. How can anyone in his right senses use the ‘F’ word in a public event? If such a person didn’t consider himself fooled when he supported 64-100% increment of petroleum prices then either he is a) insane b) a hypocrite c) a criminal or perhaps he is under the influence of “AMOATENG symptoms”.

Though we were made to believe that the TOR RECOVERY LEVY imposed on the tax payer was going pay off the TOR debt, I was shocked to my bone marrow to hear that the TOR debt had soared at an exponential degree. As it stands now, The TOR has a mountain of debt which currently stands at GHC 9743 million or 9.743 trillion old cedis. The current debt profile at TOR compares with a total debt of GHC318.6 million or 3.18 trillion cedis as at December 31, 2000. The TOR Debt Recovery Fund Levy had up to December 31, 2008 accumulated GHC720 million or 7.2 trillion cedis. As a result of it s indebtedness, TOR had not engaged in any form of refinery since 12th January, 2009. This information was provided by Mr. Alex Mould, the Ag. Chief Executive of the National Petroleum Authority. Though he said there were inconsistencies in the figures provided by TOR and her indebtedness was expected to be higher than the quoted figure, I am still worried.

Fellow Ghanaians, how come the TOR debt could go that high despite the wicked TOR RECOVERY LEVY imposed on the ordinary Ghanaian? As a buyer, how can I be told that my debt toll is increasing when I am buying at a full cost recovery and I am contributing to a fund set up defray my existing debt? Is this logical? Could there have been some corruption? Will the BNI be wrong in inviting people for questioning? Didn’t the NPP AND their economic whiz kids criticise the NDC government when the fuel prices were being SUBSIDISED?

Comrades, it will be very neophytic or infantile for anyone to say that because the international crude oil price per barrel is sold at $65 – 67 then the prices today is unjustified. This assumption is not only unintellectual but preposterous. For the purpose of the ignoramus in the system who would want to speak about the fuel price without an analysis on the exchange rate, the interest rate, inflation, the TOR debt and other economic parameters, let me state categorically that today, $1 is equivalent to GHC 1.45, the interest rate is about 30%, inflationary rate is about 20.06%, the TOR debt is about GHC 9743 million or 9.743 trillion old cedis and the other economic parameters are different than it was during the days of the NPP. Till the economists do the comparative analysis of the two scenarios, I will entreat everyone to shut up and be factual.

In the next feature I will do the analysis to prove to all and sundry that the fuel prices today is the best one could pay for under the circumstances. I will however entreat the government to find a way mitigating the effect on the Ghanaian. Please watch out for PART 2…………………………………………

By Justice Kuts [email protected]