The Chamber of Oil Marketing Companies (COMAC) is calling for a freeze on fuel taxes and levies as government continues to subsidise diesel amid rising global oil prices.
Chief Executive Officer of COMAC, Dr Riverson Oppong, says reducing the tax burden could provide a more sustainable way of cushioning consumers from rising fuel prices.
He said the government’s intervention through the Uniform Pricing Policy Fund should not be confused with a direct loss of government revenue.
“The uniform pricing policy fund is to ensure that irrespective of where you buy fuel, whether Tamale, Kumasi, etc., the price is the same,” he said.
Dr Oppong explained that the fund ensures consumers pay the same fuel price regardless of their location.
He said the real pressure on government finances comes from taxes and levies imposed on petroleum products.
“This can never be attributed to government revenue. It could be government intervention, no doubt. But the real subsidy, the real pain that will affect government budgets, is the taxes and levies,” he said.
Dr Oppong renewed his call for government to temporarily freeze some fuel taxes to ease pressure on consumers and businesses.
“How many times have we been preaching about this one cedi to be frozen for some time? You are aware, but now it has been so,” he said.
He welcomed government’s intervention to cushion consumers but maintained that more could be done through the tax regime.
“We are happy for the government intervention, and I’ll still keep on saying that that’s government intervention. It’s good. We appreciate that,” he said.
Dr Oppong said his position is driven by concerns about the sustainability of the downstream petroleum industry.
“I care. You see, I care because I care about the industry. Anything that will bring operations or the industry to a halt, I’m against it,” he said.
He also proposed that government consider using additional revenue from crude oil production to support the downstream sector.
“Ghana is an oil-producing country. George, we produce oil,” he said.
Dr Oppong argued that the government could redirect some of the unexpected gains from higher crude oil revenues to cushion the downstream sector.
“Wasn’t it a good idea for the government to sit down with stakeholders and say, Hey guys, I was meant to make $100 million; now I’m making 120 million. Can I bring this $20 million to cushion the downstream?” he asked.
He said such an approach could help bridge the gap between the upstream and downstream petroleum sectors.
“Because the downstream is crying, upstream is laughing,” he said.
“So let’s have this dialogue. Instead of one side being happy, can we share the extra profit or the win for profit that we are getting from upstream?” he added.
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