Exclusives

How Ghanaian taxi drivers cope with N360 per litre fuel

by BY OUR REPORTER

December 29, 2017 | 12:10 am
  |     |     |   Start Conversation

Unlike Nigeria where the price of premium motor spirit (PMS) or petrol is fixed at N145 per litre, it is not fixed in Ghana.
The minimum price of a litre of petrol in Ghana is 4.49 Ghana Cedis, which using an average exchange rate of 80 Ghana Cedis to one Naira is equivalent to N360 per litre.
However, there is a different brand, the Super 99 which sells for 4.99 Ghana Cedis which is equivalent to N399 per litre. Like petrol prices, the prices of diesel are similarly high when compared with the price controlled regime that exist in Nigeria.
A litre of Diesel at Total filling station in Ghana is also 4.49 Ghana Cedis which is equivalent to N360 per litre while the price of a litre of kerosene is 4.15 Ghana Cedis or N360 per litre. Prices differ marginally from one station to another.
Prices of petroleum products in Ghana are completely deregulated. The implication is the prices have moved up as crude oil prices move up in the international markets. The price of petrol has moved from 3.76 Ghana Cedis in July 2017 to the current price of 4.49 Ghana Cedis per litre.
Within the same period, price of Diesel has moved up from 3.77 Ghana Cedis to 4.49 Ghana Cedis per litre. Besides the price of crude oil in the international markets other factors that impact on the prices of petroleum products in Ghana include the exchange rate of Cedis to the dollar, as well as levies and taxes imposed by the government on the final pump price of fuel.
The government has in place a special petroleum tax of 17.5 percent which it cut to 15 percent in August in a bid to ensure prices of fuel does not rise higher than it is currently. Petroleum products are also subject to excise duties but the government has also had to scrap that to ensure that the fuel prices remain at their current levels.
Prices of petroleum products in Ghana are controlled by the National Petroleum Authority (NPA) which regulates the downstream sector of the petroleum industry in Ghana. The NPA, unlike the Petroleum Products and Pricing Regulatory Agency (PPPRA) in Nigeria, does not fix maximum prices but only publishes indicative prices for petroleum products on its website every week, in line with the changes in indicators in the international markets including crude oil prices and exchange rates of the Ghana Cedis.
On its website, the NPA describes its function as to ensure that the downstream oil industry remains efficient, profitable, fair, and at the same time, ensuring that consumers receive value for money.
But the immediate impact of the high prices of petroleum products in Ghana is seen in the type of taxis found on the roads in Ghana. Kia Picanto, and other small cars in its class that are much derided in Nigeria, are the most popular vehicle choice for taxi in Accra, the capital of Ghana and that is mainly because of its low fuel consumption for its small 1.0 litre engine.
Some Ghanaian taxis also prefer converting their cars to be powered by gas rather than PMS. This is more popular in the Tema area of Ghana. For none commercial driving, Diesel powered cars are preferred because diesel takes longer to burn.

Also unlike Nigeria, drivers do not usually fill up their tanks at the fuel stations. They just buy enough for their journey. Consequently, driving is done, when it is absolutely necessary. However, high fuel prices have not taken life out of Accra. It still remains a 24-hour City with very active night life, helped by the fact that power supply is relatively stable.
Nonetheless higher fuel prices has not made the Akuffo Ado government popular in Ghana. When in opposition, high fuel prices was one of things they criticized. But once in government, prices are almost doubling.
The higher fuel prices has affected the Governments popularity and could affect it more if crude oil prices continue to put upward pressure on prices. Like Nigeria, Ghana is also an oil producing country and so while higher crude oil prices is good news for government revenues, it also represents bad news for petrol prices.
But unlike Nigeria, the Ghanaian government, already struggling with high budget deficits, has decided not to put further pressure on its finances by introducing subsidies on petroleum products.

 

BY OUR REPORTER


by BY OUR REPORTER

December 29, 2017 | 12:10 am
  |     |     |   Start Conversation

Big Read |  

Analysis

What Nigeria must do before signing AfCFTA

Nigeria’s President Muhammadu Buhari last Wednesday gave a hint that he would sign the African Continental Free Trade Area (AfCFTA)...


Top 100 (300 x250)

MTN Felele

WSE

Newsletter Fixed income