The Institute for Energy Security (IES) is calling on the government to suspend the Price Stabilisation and Recovery Levy to ease the burden on consumers as global fuel prices continue to rise.
Research and Energy Security Analyst at IES, Smith Boahene, says although the levy may appear small per litre, its cumulative impact significantly increases the cost of fuel for consumers.
“IES is calling for the suspension of the price stabilisation recovery levy because obviously we believe that inasmuch as it’s significant, it is a little minute, but we are looking at the cumulative impact in terms of increasing litres of fuel,” he said.
Mr Boahene made the remarks while speaking on JoyNews on Monday, March 16, during a discussion on rising global fuel prices and their impact on Ghana’s petroleum market.
According to him, the call for a temporary suspension of the levy aligns with the original policy intention behind the measure to serve as a counter-cyclical tool that protects consumers during periods of rising fuel prices.
He explained that escalating geopolitical tensions in the Middle East are already pushing global crude oil prices higher, with benchmark Brent crude trading between $101 and $105 per barrel as of Monday morning.
“Such escalation is having a cascading effect in the petroleum downstream in Ghana,” he noted. “When you compute that into the landed cost of fuel, obviously, it is on the rise.”
He noted that during the first pricing window this month, ex-pump prices increased by about 13% for petrol and nearly 28% for diesel, reflecting the growing pressure on the downstream sector.
With Ghana relying heavily on imported fuel products, he stressed the need for measures that protect consumers from global market shocks.
“Ghana being about 60% net imports of fuel, we need to be able to cushion the consumer at the end of the day,” he said.
Mr Boahene pointed out that the government has previously suspended the levy during difficult economic periods. He cited 2021, when the measure was temporarily halted following the economic disruptions caused by the COVID-19 pandemic, as well as another short suspension period last year.
Currently, he said the levy accounts for roughly 16% of the price of gasoil and about 14% of gasoline.
While the effect per litre may appear modest, he argued that the overall financial burden becomes significant for transport operators and businesses that consume large volumes of fuel.
“In times where we don’t even know when this conflict is going to come down, suspending the levy will offer some sort of relief for consumers,” he added.
IES believes such a move would be consistent with the levy’s original objective of stabilising prices and protecting consumers during periods of global fuel price volatility.
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Source: www.myjoyonline.com