Operators Project 50% Increase In Transport Fares

Passengers should gird their loins to spend more on transportation as operators announce skyrocketing fares due to fuel price hikes.

Despite caution for commercial transport operators to halt arbitrary fare increments, two unions – The Concerned Drivers Association of Ghana and the Transport Operators of Ghana – have flouted directives by the parent association, the Ghana Private Road Transport Union (GPRTU), to slap commuters with up to 50% increment on fares.

In a joint statement issued on Monday, April 8, 2024, the two groups announced an increment from GH¢ 10.00 to GH¢ 15.00 for a short-distance taxi service.

They also raised short-distance or intracity transport fares by 15 percent and added a 20 percent increase for intercity or long-journey transport.

The fare hike is expected to take effect on Saturday, April 13.

The ripple effect will be a high cost of goods and services, further burdening Ghanaians amid power outages, high taxes, and rising cost of living.

The recent action by the operators was triggered by the reintroduction of the Price Stabilization and Recovery Levy on petroleum products by the National Petroleum Authority (NPA).

The regulator instructed all Oil Marketing Companies and related stakeholders on April 4 to impose a levy of 16 pesewas per litre on petrol, 14 pesewas per litre on diesel, and 14 pesewas per kilogram of Liquefied Petroleum Gas (LPG).

“Just as it may have been noted by most Ghanaians, the government appears to be indifferent regarding any reduction in the price of petrol as well as those of vehicle spare parts and lubricants.

“Also, the prevailing economic difficulties and other factors are worsening the living conditions of transport owners and drivers,” the commercial transport operators justified.

What can be done to address the situation?

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

Total crude oil produced by Ghana in 2023 amounted to 35.42 million barrels, according to former Finance Minister Ken Ofori-Atta.

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

COPEC-Ghana Executive Secretary Duncan Amoah told The Ghana Report:

“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 a 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 it back to Ghana.

“They 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 failure of BOST 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 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”.

Additionally, Mr Amoah wants the government to scrap taxes that add up to the fuel cost on the market.

This is because there are about 12 different taxes and levies on petroleum products, which adds up to almost 40% of the fuel price.

These taxes include the Energy Debt Recovery Levy, Road Fund Levy, Energy Fund Levy, Price Stabilisation and Recovery Levy, Sanitation and Pollution Levy, Energy Sector Recovery Levy, Special Petroleum Tax and Primary Distribution Margin, BOST Margin, Fuel Marking Margin, Marketers’ Margin and Dealers (Retailers/Operators) Margin.