Ghana removes fuel subsidy

Following an increase in the prices of crude oil, the Ghanaian Government, on Thursday, announced a removal of fuel subsidies.The head of Ghanas National Petroleum Authority, Mr. Alex Mould, announced this in a statement on Thursday.According to the statement made available to Reuters, the move also follows the depreciation of the Ghanaian cedi.The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.The Nigerian government is currently involved in an ongoing battle with its citizens over fuel subsidy removal.Ghana, which joined the club of oil producers in West Africa last year, has come under increased pressure from the International Monetary Fund to remove the fuel subsidies.The International Monetary Fund has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but do promote corruption and smuggling.The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.Mould said the cumulative effect of the rise in crude oil prices this year and the about 5.7 per cent depreciation of the cedi meant a 25 per cent increase in cedi terms in the cost of procuring crude oil and petroleum products since January.Mould, said Ghana had spent about 450 million cedis on fuel subsidies in 2011.The price change effective from December 29, will see the cost of Liquefied Petroleum Gas increase by 30 per cent while petrol and diesel will go up 15 per cent at the pump.Mould said the NPA would be monitoring crude oil prices and would not hesitate to increase or decrease pump prices if the average crude price stayed within the $107-110 per barrel range.Brent crude rose four cents to $107.60 a barrel by 0933 GMT on Thursday after falling nearly $2 the day before, while the Ghana cedi was trading at 1.6370/95 to the United States dollar.Ghanas Minister for Finance, Mr. Kwabena Duffour, said the removal of subsidies would have a positive impact on Ghanas economy.Subsidising fuel is not sustainable, Duffour told Reuters. It is the right thing to do so we can sustain our fiscal consolidation.By this increase, according to the NPA, the price of petrol has risen to GNp175.48 (N184.972) per litre; diesel is now GHp 177.09 per litre ((N186.668); while LPG will go up by 30 per cent at GHp 136.19 per kilo (N143.765).
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