Transport fares increased by 13%

Road transport operators have slapped a 13% increase in fares effective June 5, 2021.

The Ghana Private Road Transport Union (GPRTU) announced the increment on Wednesday, June 2, citing recent fuel price hikes.

Prices of goods and general living conditions are expected to shoot up following the new fares.

Increases in fuel prices have been driven primarily by taxes introduced by the government, with rising global crude oil prices and depreciation of the Ghana Cedi playing a role.

According to GPRTU, the upward adjustment was in line with the administrative arrangement on public transport fares and would affect all commercial vehicle operators.

 

The operators, however, indicated that the government has assured it would continue with efforts to prevent a sharp rise in input cost.

In addition, GPRTU said the government, through the Finance Ministry, has assured that it would extend the suspension of payment of quarterly income tax by owners of trotro and taxis to intercity commuter vehicles.

 

The move, the union noted, would reduce operational cost and urged the government to keep to its promise to bring relief to all.

Gov’t Reduces Fuel Prices By 8 Pesewas After Protests

The government slashed fuel prices by eight pesewas per litre following agitations over 17 pesewas per litre price hike announced by the National Petroleum Authority (NPA).

This resulted in fuel prices beyond GHC 6 per litre for some Oil Marketing Companies (OMCs).

Skyrocketing fuel prices triggered a huge uproar on social media amidst other challenges leading to the #Fixthecountry protests, which topped trends for days on Twitter.

Other transport unions, including Ghana Committed Drivers Association, International Drivers Road Transport Union, Truth Drivers Union and the Concerned Drivers Association announced a 20% increment afterwards, but the implementation was deferred.

According to them, a gallon of fuel that used to be sold at the pump for GHC 24.52 pesewas is now sold at GHC 27.22 pesewas.

Also, prices of spare parts and Driver and Vehicle Licensing Authority (DVLA) charges have shot up considerably, they lamented.

As of 2016, a gallon of fuel, for instance, was between GHC 14.000 and GHC 16.00. Since 2017, the prices have increased astronomically to the current GHC 27.22 pesewas, but without the corresponding increases in lorry fares, the group explained.

They pointed out that the strict implementation of the deregulation of the petroleum products sub-sector since 2012 has meant that government no longer subsidises petroleum products except premix fuel.

Crude oil-producing country importing fuel for use

Despite the country producing oil in large quantities, the lack of refineries has prevented the country from enjoying lower prices of finished products.

As of September 2020, crude oil production capacity in Ghana was 196,000 barrels per day.

Addressing a meeting with 20 international oil companies in Norway, Finance Minister Ken Ofori-Atta indicated that Ghana could hit 500,000 barrels per day by 2025.

However, Ghanaians continue to buy fuel at exorbitant prices due to importation and taxes slapped on the commodity.

What can be done to address fuel hikes?

The COPEC-Ghana Executive Secretary told theghanareport.com, “We have a local refinery that we could have leveraged to get some fuel security at lower prices, but unfortunately, we don’t think there is the political will to refurbish the Tema Oil Refinery”.

Mr Amoah observed a fully functional refinery would cut the logistical cost, which adds to the price build-up by exporting crude to Europe to be refined before importing back to Ghana.

“The need to get TOR back on stream and the need for political interference to be stopped holds the key for all for us,” he underscored.

Additionally, he cited the Bulk Oil Storage and Transportation Company Limited (BOST) failure in executing its mandate.

Mr Amoah explained that BOST is supposed to store huge volumes of fuel and release to the market to level prices and to check shortages “without overstretching the already burdened Ghanaian taxpayer”.

However, “we do not see that function of BOST, and they are now focusing on trading…which was not the purpose of the BOST Act but to hold strategic stock”.