The Institute for Energy Security (IES) believes fuel in Ghana should not sell for more than GH¢6 per litre if the government effectively manages the sector.
According to its Executive Director, Nana Amoasi VII, many of the variables that influence the price of fuel in Ghana are within the control of the government either directly or indirectly.
Speaking on the Citi Breakfast Show on Tuesday, he said the depreciation of the cedi against the dollar has significantly exposed the price of fuel in Ghana to the international market, making it very unstable.
“If we can and we understand fuel prices work, the price for fuel should not sell for more than 6 cedis per litre,” he said.
Most oil marketing companies in Ghana currently sell fuel around GH¢ 6.90.
There are about seven taxes and levies imposed on petroleum products in the country, which culminates into over GH¢ 2 per litre.
But according to Nana Amoasi VII, reducing or doing away with some of these taxes will help to bring down the price of fuel in the country.
Among other suggestions, he also said strengthening the Tema Oil Refinery (TOR) and the Bulk Oil Storage and Transport (BOST) companies will help to limit Ghana’s exposure to the shocks in the international market.
“We are largely exposed to the national market… Irrespective of the international market dynamics, we can reduce our fuel price by removing some taxes or levies and increase it by hiking the taxes and levies. We can reduce our fuel prices if we left TOR and BOST to work, or increase it if we allow them to rot.”
Again, he said, stabilising the currency would help address the situation.
He said: “If we are able to manage the cedi to dollar relations, it will help. There are a lot of variables we have to look at. We cannot just say the international prices are going up and so ours should go up. When international prices plunged to 20% per barrel, how much did our fuel price fall?”
“When we remove the taxes, and we don’t manage the internal machines to manage our exposure to the international process, we will come back to nought. TOR could have played a key role. BOST could have played a key role,” he added.