Dr. Riverson Oppong
The CEO of COMAC, Dr Riverson Oppong, has warned that the latest fuel price relief measures could pile significant debt onto industry players, as oil marketing companies are forced to pre-finance government policy.
Speaking on PM Express on Joy News on Wednesday, he said the intervention, though beneficial to consumers, places heavy financial pressure on downstream operators.
The government recently announced measures to stabilise petroleum prices in response to global shocks linked to the Middle East conflict, a move aimed at cushioning consumers from rising fuel costs.
But Dr Oppong cautioned that the relief is not being funded through tax reductions.
“The relief of GH¢0.36 on petrol and GH¢2 on diesel is true, but let me also highlight the fact that this is a relief that stems from operational margins of activities of the industry, and it has not touched the government as it did not touch any tax or levies that go into the government coffers.”
He said this means key state agencies will have to find alternative funding to sustain the policy.
“But this also means that NPA and even BOST would have to cough up external money to support this. So for me, the question here is whether this is a relief or pressure on institutions?”
While acknowledging the benefit to consumers, he warned of the cost to industry players.
“I believe that the ordinary Ghanaian will be happy. We are also happy because we buy fuel. But I think the term that we are giving it needs to be considered where there is no touch on tax.”
According to him, the structure of the intervention effectively shifts the burden onto oil marketing companies.
“Discounted diesel especially means that oil marketing companies will have to pre-finance the purchase and retailing of the product before government pays us after roughly one and a half months.”
He revealed that the industry has already raised concerns with regulators over the strain on working capital. “In today’s meeting with NPA, we made NPA aware that these are working capital of the industry, and therefore we want payment as fast as possible.”
Dr Oppong illustrated the scale of the exposure, noting that even moderate volumes could translate into significant debt.
“Assuming that one person lifts 10 million litres a month, that means that the person is in debt of GH¢603,000, which is more than half a million cedis that could have purchased fuel for retailing.”
He added that industry players are now seeking relief from tax authorities to ease the pressure.
“On the other hand, we are also going to negotiate with GRA since no tax was touched, we want to plead with GRA to also delay tax payments from our members or the industry, that’s the LPG and oil marketing companies, and that also brings some buffer onto what we are doing.”
He described the situation as unfair to downstream operators.
“Is just unfortunate. Let me put it very unapologetically here. It’s just unfortunate that the downstream business is always receiving the burden for the government; we are the ones always coming to solve problems for the government.”
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Source: www.myjoyonline.com
