The Centre for Environmental Sustainability and Management has cautioned the government to proceed carefully with its plan to suspend various taxes, levies, and margins on petroleum products.
This move was initially proposed in response to rising crude prices sparked by the US–Israel–Iran conflict; however, the organisation’s Executive Director, Mr Benjamin Nsiah, noted that global market prices have already begun to decline.
Last week, Cabinet directed the suspension of these levies to alleviate the financial burden on consumers as fuel prices reacted to global volatility.
Following this, the president instructed the finance and energy ministers to take immediate steps to reduce fuel costs by removing specific taxes and margins effective from the next pricing window.
Despite these directives, Mr Nsiah advised that rushing into such a decision could create unforeseen challenges.
During an interview on Frontline on Rainbow Radio 87.5FM, he stated, “We have asked the government to tread with caution in reducing some taxes, levies, and margins on petroleum products in response to rising crude prices following the US–Israel–Iran conflict. This is because prices of fuel have started dropping on the world market. So, if the prices are dropping, there would be no need for the short-term measure. Even today as we speak, the price on the world market has dropped again and is cheaper than before.”
He further explained that diesel prices might decrease by 16 April if market conditions remain stable. This suggests that the government could unnecessarily lose vital revenue by implementing tax cuts just as the market self-corrects. Consequently, he urged the authorities to monitor market trends for a longer period before taking further action.
A secondary concern raised by Mr Nsiah involves the national economy, specifically the need to maintain an acceptable level of inflation. Given that the Bank of Ghana is targeting a range of 6% to 10%, he argued that any fiscal measures must remain consistent with broader inflation and interest rate targets.
According to him, these measures could pose significant logistical and financial hurdles for oil marketing companies (OMCs).
Since many OMCs have already paid taxes on their current stock, a sudden removal of levies would necessitate a complex system of tax refunds to ensure they are not unfairly penalised.
Mr Nsiah questioned which specific products would be affected, pointing out that while diesel remains expensive, petrol prices are relatively lower.
He stressed that a period of careful market observation would be far more prudent, allowing the government to develop sustainable solutions rather than reactive, short-term fixes.
By: Rainbowradioonline.com/Ghana
