- The caretaker Finance Minister has said that petroleum prices will go up by 5.7%
- This was necessary due to the introduction of two new levies
- Ghanaians will be expected to pay more on lorry fares henceforth
Caretaker Minister for Finance, Osei Kyei Mensa-Bonsu, says there will be a 5.7% increase in petroleum prices.
It followed the introduction of two levies by the Akufo-Addo administration in the 2021 Budget Statement presented to Parliament on Friday, March 12, 2021.
“I should note that on the basis of existing world crude oil prices, the implementation of the two proposed levies for sanitation and pollution as well as to pay for excess capacity charges, would result in a 5.7% increase in petroleum prices at the pump,” he stated.
The Akufo-Addo administration is proposing a Sanitation and Pollution Levy (SPL) of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act (ESLA).
When crude oil prices increased substantially between 2017 and 2018, the administration abolished excise taxes and reduced the special petroleum tax from 17.5% to 13% to mitigate the impact on domestic petroleum prices.
But, due to the difficulties faced by the economy arising from higher excess capacity payments in the energy sector, which have not reflected in electricity tariffs, Mensa-Bonsu who is also the Minister for Parliamentary Affairs and Majority Leader told Parliament that “there is the need to find additional resources to cover the excess capacity charges that have resulted from the Power Purchase Agreements (PPAs) signed by the previous Government which required payments for capacity charges even when the plants involved were idle or unutilised.”
He said it had become “very necessary” for the Akufo-Addo administration to consider a review of the energy sector levies.
“The Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA is hereby submitted to this House for approval,” he stated.
Meanwhile, Mensah-Bonsu said Ghana’s total public debt increased from Ghs122billion to Ghs291.6billion as of the end of December 2020.
He attributed the ballooning public debt stock to the current coronavirus pandemic, the banking sector cleanup among others.
According to him, the fiscal impact of the coronavirus pandemic on the Ghanaian economy was Ghs19.7 billion, that of the financial sector clean-up was Ghs21billion with the cost of excess capacity charges to IPPs standing at Ghs12billion.
But for these factors, the country’s public debt would have been hovering around Ghs238.9billion representing 58.7% of GDP, he stated.
“Despite the impact of COVID-19, the rate of growth of the public debt has been lower than what previous governments recorded,” he stated.
He said between 2004 and 2008, Ghana’s debt stock increased by 30% under the Kufuor-led NPP Administration, between 2008-2012 the debt stock jumped to 269% under the Mills NDC administration and 243% between 2012 and 2016 under the Mahama NDC government and between 2016 to 2020, the country’s debt stock has risen to 137% under the Akufo-Addo administration.
He said under the leadership of President Akufo-Addo “we took the required swift, drastic and decisive measures to mitigate the spread of the pandemic.”
He added that the Akufo-Addo administration is now better positioned to recover and build back a more resilient economy not only because they know how to do it but also because the grace of God has been assured for this journey.
In other news on YEN.com.gh, former President John Dramani Mahama donated Ghs10, 000 to the families of the teenagers who drowned at a beach in Apam in the Central Region.
The tragic incident occurred on Sunday, March 7, 2021, when teenagers numbering over 20 went swimming at the beach.
They were hit by unsuspecting tidal waves, leading to the drowning of over 12 children.
Donating on behalf of the presidential candidate of the National Democratic Congress (NDC) in the 2020 general elections, running mate, Professor Naana Jane Opoku-Agyemang, said the cash donation was to support the traditional rituals and burial services of the teenagers.
The former president also donated GHS 3,000 to the Apam Fishermen Council.
According to the Gomoa West Security Council, burial services for the 12 deceased teenagers will be held on Tuesday, March 16, 2021.
The bodies will be given to the individual families to bury instead of having a mass burial.
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