Ghanaians would have been paying GHS8 for a gallon of petrol if the Tema Oil Refinery (TOR) were functioning, CEO of Gasop Energy, Kojo Poku, has said.
Consumers are currently paying about GHS15.40 pesewas for petrol and GHS14.50 pesewas for diesel, after a 27% hike in prices of petroleum products followed the passage of the Energy Sector Levy bill.
TOR, which has the capacity to refine about 60,000 barrels of crude per day, has been dormant for a few years.
Mr Poku told Chief Jerry Forson on Accra100.5fm’s morning show, Ghana Yensom, on Tuesday that the high prices of petroleum products stem from the fact that Bulk Oil Distribution Companies (BDCs) are forced to import finished crude products from Europe at high cost, due to TOR’s dormancy.
He said the BDCs, therefore, pass on the cost of the imports to the Ghanaian consumer, since they have to pay for the shipment, transport insurance, freight components, as well as taxes, in dollars or pounds.
He said the prices of fuel would have been significantly less were the BDCs buying crude from the country’s only state refinery.
TOR was shut down a few years ago after its massive indebtedness reduced its already tottering efficiency. Government instituted the TOR Debt Recovery Levy towards offsetting the debt. It is one of the tax components on petroleum products. In a recent report, however, energy think tank Africa Centre for Energy Policy (ACEP) said Ghanaians have overpaid the debt.
“ACEP still maintains that consumers have overpaid the TOR debt,” Executive Director Dr Mohammed Amin Adam told journalists at a press conference in Accra Thursday January 7, 2016.
“At the time the levy was instituted, the total debt stood at GHS450 million. By 2009 the total debt had grown to GHS900 million due to non-application of the revenues to service the debt as well as interest accumulation.
“Our analysis shows that between 2009 and 2015, the total collection from the levy is in excess of GHS1.9 billion. This effectively amortises the debt assuming an interest rate of 10%,” Dr. Adam said.
ACEP said it is, thus, puzzled that the government still imposes a TOR Debt Recovery Levy on Ghanaians.
“We, therefore, find it difficult to comprehend why consumers should continue to pay this debt. Ostensibly, the TOR Debt Recovery Levy has over the years been misapplied, aided by the weak oversight of parliament,” Dr. Adam added.