Zeroing of PSR levies on petroleum products takes effect on November 1

On October 23, 2021, 10:29 AM

Effective Monday, November 1, 2021, the Price Stabilisation and Recovery Levy (PSRL) on three petroleum products; petrol, diesel and liquefied petroleum gas (LPG) for two months would be implemented, the National Petroleum Authority (NPA), has announced.

This follows an instruction from the Finance Ministry for the NPA to implement the President’s directive for the next pricing window, which commences on the first day of next month.

To this end, the sector regulator, NPA, has assured consumers of petroleum products that, “it is working to effect the necessary adjustments in the pump prices in compliance with the President’s directive.”

The Authority also assured of the government’s determination to “cushion the burden as it has done over the past five years,” knowing the impact of the rising prices of petroleum products on the international market under the price deregulation regime.

The zeroing of the price stabilisation and recovery levy on petrol, diesel and LPG forms part of the efforts of the government to mitigate the rising cost of fuel due to global rising prices.

The other thing being done by the government to that effect is the continued payment of subsidies on premix fuel and residual fuel oil from the excess funds of the PSR account for the stated two months.

“These requests were granted in recognition of the difficulties Ghanaians are experiencing with pump prices and the corresponding impact on other aspects of national life,” the NPA explained.

The NPA announced that the government has approved the removal of the PSR levies on petrol, diesel and LPG on Monday, October 11, which is expected to lead to the reduction in fuel prices in various pumps.

Commenting on the removal of the levy, the NPA, who made the recommendation to the government, said the move would provide relief to consumers of petroleum products.

At this time, it is important that the PSRL which is currently 16 pesewas per litre on petrol, fourteen pesewas per litre (GHp14/Lt) on diesel, and 14 pesewas per kilogram on LPG are zeroed to cushion consumers,” it stated.

The PSRL was introduced into the downstream petroleum sector to stabilise prices for consumers and pay for Premix Fuel and Residual Fuel Oil (RFO) subsidies.

It was used as a buffer for under-recoveries in the petroleum sector, stabilise petroleum prices for consumers, and subsidise premix and residual fuel oil.

Nonetheless, the Chamber of Petroleum Consumers-Ghana (COPEC) called on the government to abolish the levies.

Rather, COPEC highlighted the need for authorities to apply the already collected funds to offset or stabilise the forex and price differentials from increasing the price build-up.

NDC calls for scrapping of taxes on fuel

Despite the two months zeroing of the PSR levies, the opposition National Democratic Congress (NDC) has called on the government to scrap the newly introduced taxes on petroleum products.

These include the special petroleum tax (SPT) of 46 pesewas, the energy sector levy of 20 pesewas and the sanitation levy of 10 pesewas on a litre of diesel and petrol as well as the new increase of 18 pesewas on a kilogram of LPG.

The National Communications Officer of the part, Mr Sammy Gyamfi, argued at a press briefing on Monday, October 18, that the abolishing of these taxes would help bring down the cost of fuel and reduce the economic woes of Ghanaians.

“This will stabilise the ever-rising prices of general goods and services and go a long way to ameliorate the plight of suffering Ghanaians. But should the government fail to heed our wise counsel as they always do, prices of general goods and services will continue to soar.

Hardships in the country will continue to worsen to gargantuan levels and all of us, irrespective of our political affiliations, except the few privileged ones in government, will continue to suffer,” he said.

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Story By Francis Ntow