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Lockdown social cost: Alex Mould calls for 20% fuel reduction

A former Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC) Alex Mould has advocated a 20 per cent reduction in pump prices of fuel, to alleviate public transport social distancing cost.

This followed a directive from authorities of road transport operators that commercial vehicles should reduce the number of passengers aboard their vehicles to curb the spread of the Coronavirus.

Taxis are no longer allowed to have more than two people in a row, vehicles that carry one to four persons in a row are to reduce it to three while those who seat one to five passengers are also to change it to three.

But in a statement issued in Accra yesterday, Mr Mould said “The challenges of the current season provide a responsibility to quickly visit win-win opportunities to alleviate some of the financial burdens on all Ghanaians – April 1st presents a “no-brainer” opening to reduce the cost of petrol at the pump.”

It said the pandemicwas expected to bring about economic challenges such as loss of income, business, hikes of goods and services, and other factors impacted by increased transportation costs. 

 According to the statement, petrol had been at its lowest price since the 1990s – at $0.38 per gallon on wholesale from U.S refiners and wholesalers and that a 20 per cent reduction should be possible.

It explained that petrol was currently imported into Ghana for less than $0.24 per litre or GHS 1.40 per litre, based on foreign exchange rate of GHS5.85 GHS/USD.

 It said prices had dropped from $540 per ton on March 1, to $434 on March 16, and was likely to go down further to $212 per ton on April 1.  

“Going by these Price Build-Up (PBU) indicators and the methodology used to derive them, we expect petrol prices to go as low as GHS GHS4.00/litre. This price can go down even further with government interventions in the form of tax breaks”, it said.

Additionally, the statement said from the PBU, the taxes and distribution costs of petrol were GHS1.50/litre and GHS1.10/litre respectively which represents about 65 per cent of the pump price of petrol and made Ghana one of the highest taxed countries with respect to petrol. 

“I am reliably informed that Government is being advised to seriously contemplate removing the nuisance “Special Tax” (GHS0.46/litre) and the outdated “Price Stabilization” levy (GhS0.16/litre). If done, we could see prices fall even lower than the expected GHS 4.00/litre to below GHS 3.50/litre”, it said.

These reductions, it said would be a relief to so many especially the nearly 80 percent ofthe country’s population who constitute key workers and would have to pay more for observing social distance in transportation.

BY TIMES REPORTER

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