Economics Professor Ernest Quartey has backed government’s decision to hold on to fuel taxes while adjusting margins, warning that any aggressive cuts could disrupt planned spending.
Speaking to George Wiafe on Joy News’ PM Express Business Edition on the sidelines of the IMF Spring Meetings in Washington, D.C., Prof. Quartey stressed the need for caution even as consumers push for relief.
“Inasmuch as I am also a consumer, and I would love to see lower prices at the pumps, I think these taxes have been earmarked already.
“Government has budgeted with the taxes, and there are some critical expenditures that need to be incurred, so you need to strike a delicate balance.”
He said the approach of adjusting margins rather than taxes shows some responsiveness to public pressure without undermining fiscal commitments.
“And I believe I agree with the government that if you touch the margins, at least you show some commitment and get some reduction to consumers.”
Prof. Quartey warned that the uncertainty surrounding global tensions makes it risky to take drastic decisions now.
“We also have to note that this is a war that nobody can predict the end. So you in as much as you want to assist consumers, you cannot do everything today.”
He argued for a phased strategy that allows government to respond to changing conditions over time.
“You have to be gradual in the sense that as time progresses, you will know whether to even do more, or perhaps the margins you need to put them back. That’s, for me, the way to go.”
He added that any relief measures must remain flexible and subject to review.
“It’s a gradual process, review over time and see whether you need to do more or you need to even take out what you have given to consumers.”
His comments come as the Presidency recently indicated it is stepping in to help stabilise petroleum prices following tensions in the Middle East, which have triggered concerns about possible spikes in global oil prices and their impact on Ghana’s economy.
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Source: www.myjoyonline.com