Fuel prices cut by 15 pesewas per litre
The Finance Minister, Ken Ofori-Atta, has revealed government’s decision to cut fuel prices by 15 pesewas per litre effective April 1, 2022.
This comes on the back of measures taken by the government to reduce economic hardship on Ghanaians.
The said cut is expected to last for three months.
The Minister disclosed this at a press briefing on Thursday, March 24, 2022.
‘’To mitigate the impact of the rising price of petroleum products at the pump, for the next three months, government has decided to reduce margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from 1st April,’’ stated the Minister.
A breakdown of the 15 pesewas cut revealed the following;
- BOST margin reduced by 2 pesewas per litre
- Unified Petroleum Pricing Fund (UPPF) margin reduced by 9 pesewas per litre
- Fuel Marking Margin (FMM) reduced by 1 pesewa per litre
- Primary Distribution Margin (PDM) reduced by 3 pesewas per litre
According to the Finance Minister, these reductions are expected to reduce prices of petrol and diesel by 1.6% and 1.4% respectively, adding that it should help stabilize the prices of fuel at the pumps and also cushion consumers.
‘’Ladies and gentlemen, these reductions in margins are expected to reduce prices of petrol by 1.6% and diesel by 1.4%. We anticipate that the measures taken to strengthen the currency will help further stabilize the prices at the pump,” said the Finance Minister.
‘’Ladies and gentlemen, the NPA is in discussion with the OMCs to reduce their margins within the spirit of burden-sharing. The Government will do all it can to ensure consistent supply of fuel and manage the rate of ex-pump price increase by ensuring that BoG has access to adequate foreign exchange,’’ he added.
Presently, a litre of diesel and petrol are going for GHS 10.80 and GHS 9.70 respectively.
Touching on the expected windfall from increments in the price of crude oil on the international market, the Minister noted that the much talked abut windfall expected to accrue to government is a mirage given the country’s status as a net-importer of oil.
‘’Ladies and gentlemen, the rising prices of fuel at the pumps is influenced largely by the rising crude oil prices on the international market and the exchange rate depreciation. Though the rise in crude oil prices should have been to our benefit on net basis, Ghana’s import of petroleum products amounts to 5.2 times the value of the proceeds from its crude oil exports.
“In 2022, we exported $3,947.70 million of which Ghana’s portion was $513 million. However, we imported $2,719.00 of crude oil and finished products. The purported windfall gain in foreign exchange is a mirage,” he noted.
He continued stating that, “From January to date, the average ex-pump price of diesel and petrol have increased by 57% and 45% respectively. Unlike in other countries where the hike in crude oil prices and exchange rate volatility are leading to shortages in supply of petroleum products, government is implementing measures to guarantee constant supply of petroleum products.”
In its newly outlined expenditure cutting measures, the government is expected to save a total of GHS 3.5bn.
According to the Minister, the outlined expenditure cutting measures will significantly improve the macroeconomic conditions of the country and restore confidence in the economy.
Adding that, government is optimistic that the economy will grow bigger this year as the expenditure measures will address both the immediate and medium-term challenges facing the economy.
