Amin Adam urges government to scrap fuel taxes, levies for relief

Former Finance Minister and Ranking Member of the Parliament’s Finance Committee, Dr Mohammed Amin Adam, has criticized the ruling National Democratic Congress (NDC) for its handling of rising fuel prices. In a Facebook post on September 27, Dr Amin Adam pointed out that the NDC's explanations for the price hikes, such as global petroleum prices, exchange-rate movements, and international market conditions, were the same as those used by the previous National Democratic Congress (NPP) government.

He reminded the public of the debate during the 2021 election campaign, when the NDC's opposition stance attributed fuel price increases to poor economic management, taxes, and the depreciation of the cedi. Dr Amin Adam cited data from the US Energy Information Administration showing that Brent crude oil prices rose from about US$50 per barrel at the start of 2021 to about US$86 by late October of that year.

He also referenced the International Monetary Fund's October 2021 report, which stated that Brent crude had reached US$85 per barrel due to tight energy supplies and rising global energy costs. The economist argued that as a net importer of refined petroleum products, Ghana is susceptible to international price movements and exchange-rate changes.

According to Dr Amin Adam, the formula for determining the domestic pump price remains the same: International product price × Exchange rate + Taxes/Levies + Margins. Dr Amin Adam defended the measures taken by the NPP government to alleviate consumer burden from rising fuel costs, including the removal of the excise tax on fuel, reductions in the Special Petroleum Tax, changes to tax structures, and the Gold for Oil programme.

He contrasted these measures with the current government's temporary diesel price support of GH¢2 per litre and the GH¢1 per litre levy, which he claimed has eroded some of the relief provided. The former Finance Minister also highlighted the impact of exchange rate movements on fuel prices and called for broader interventions to address the issue, such as reviewing or suspending recent increases in petroleum-related taxes.

Fuel prices have continued to climb, with COPEC projecting petrol at GH¢16.26 per litre and diesel at GH¢19.07 per litre in the second pricing window of September, citing increases in international crude and refined petroleum product prices. As of September 17, GOIL listed petrol at GH¢16.64 and diesel at GH¢18.46 per litre.