Energy Think Tank, Africa Centre for Energy Policy (ACEP) has called on government to immediately apply some estimated accumulated balance of GHS948 million in the Price Stabilization and Recovery Levy (PSRL) Account to cushion petroleum consumers.
ACEP believes in order to give credibility to the policy, utilization of the accumulated balance is necessary to cushion consumers in this high oil price period, adding that simply zero-rating the PSRL for two months creates the assumption that government does not intend to activate the price stabilization purpose of the PSRL, “thus raising the fundamental accountability question of what government intends to use the estimated balance of GHS948 million in the PSRL account for”.
In a statement, ACEP indicated that “Based on consumption data of petroleum products between 2016 and a half year of 2021, the PSRL is estimated to have cumulatively raised about GHS2.53 billion, out of which an average of 50 percent is estimated as subsidies for premix fuel and RFO”.
“Adjusting for 25 percent no collection rate or theft by some Oil Marketing Companies (OMCs), the PSRL is estimated to have cumulatively raised about GHS1.89 billion. Out of this amount, about GHS948 million is expected to have been cumulatively spent on subsidies, leaving about GHS948 million as the balance of the account, given that levy has never been used to stabilize prices since it was imposed in 2015”.
It further argued that in the current escalating price regime, the application of the PSRL for its legally established purpose is an easier and more responsive approach to cushion consumers than what is proposed by NPA.
ACEP also called on Government to ensure that GRA improves the efficiency of revenue collection from the levies in order to allow the reduction of levies to further cushion consumers.
The prices of a litre of petroleum products according to ACEP,have increased by about 33 percent in 2021 alone, which introduce significant cost burden for the productive sector and the average Ghanaian.
“Addressing this will require pragmatic interventions from the government which goes beyond the PSRL. This situation calls for a holistic review of the downstream price mechanics through regulation of taxes and levies from the government on one hand as well as margins and market failure on the part of the NPA“.
It averred that “Government should take steps to review the margins, taxes, and levies regime for petroleum products to eliminate those that have outlived their usefulness”.
Read the rest of the statement below
