The recently elected govt of Ghana has scrapped fuel subsidy to reduce budget deficit.

Some persons won't see this.

** Ghana scraps fuel subsidy to reduce budget deficit

* Ending subsidy aims at narrowing budget deficit

* Plan to scrap last year was delayed


ACCRA, May 31 (Reuters) - Ghana has scrapped costly fuel subsidies to help restore fiscal stability after overshooting its budget deficit target by nearly 100 percent last year.

The National Petroleum Authority (NPA) said in a statement on Friday that the decision followed a government directive to achieve full pass-through petroleum products prices in the West African cocoa, gold and oil exporter.

"By this, the government has completely removed subsidies on petrol, gas oil and LPG (liquefied petroleum gas), which form about 95 percent of domestic (petroleum) products, effective 1st June," NPA chief executive Alex Mould told Reuters after the announcement.

The measure will result in an immediate 3 percent hike in petrol and LPG, while diesel fuel will increase 2 percent.

Mould said the policy would be reviewed after two weeks and any fluctuations in international crude oil prices would be passed on to the consumer.

Ghana's economy has been one of the world's fastest growing since oil production started in 2010, but the government has struggled to steady its cedi currency and contain deficit spending.

The 2012 deficit reached 12.1 percent of gross domestic product (GDP), almost double thetarget of 6.7 percent, due to excess public sector wages, a shortfall in projected tax revenue and rising costs for fuel subsidies.

The cost of subsidies last year reached one billion cedis ($500 million) and was expected to rise to 2.4 billion cedis this year, before the NPA raised prices in February.

Ghana has set a 2013 deficit target of 9 percent of GDP.
Like several other countries in West and Central Africa, Ghana had planned to cut swelling fuel subsidies last year following pressure from the International Monetary Fund and the World Bank, who see them as wasteful and inefficient.

But the measures were delayed ahead of national elections in December which confirmed President John Dramani Mahamain office after the unexpected death in July of his predecessor, John Atta Mills

http://mobile.reuters.com/article/idUSL5N0EC3X920130531?irpc=932

Even though I am earning less than 90k every month. I was in total support of subsidy removal and would still support it should Mr. President decide to do away with it by tomorrow. When a particular group of persons or people corners the resources of the nation,I think is tantamount to theft and robbery. Is better for us to suffer it a little and pave way for our unborn generation to enjoy it rather than to be held to ransom by the very cabals that the subsidy fees are paid to. With all sincerity, I am in total support of subsidy removal. GEJ please remove fuel subsidy.

gramci: Some persons won't see this.

Ghana is a serious country that does not play politics with everything. This removal of fuel subsidy followed a fuel price hike about 2months ago (in February). In few years time when Ghana down stream sector blossoms, and when Nigerians start making SILLY comparisons, we should remember when Ghana took this very BOLD step. No occupy Ghana, no noise from opposition parties, no street protests

@poster
What is your point?

What is Breaking in that news? BTW are we Ghanaians?

Show us the benefits so far since your drunken master increased the pump price more than a year ago? Nonsense!!

thats a nation that understand capitalism.
the economy of that country is on the move to the top!

emm, have the Ghana "opposition" started "occupy accra?"

noooo. Lets go and occupy ghana. Lie mohd pls issue a statement and call their gej retardeen. Labour call a strike. We are going to make sure the president doesnt succeed. Moderator front page fast fast

Dangote recently announced plans to build a mega refinery but not many people know that plan is predicated on govt removal of fuel subsidy. Without removal of fuel subsidy, Dangote and others interested in building refineries will simply take their funds elsewhere. Dont be surprised if Dangote changes his mind and moves his planned refinery to Ghana. Except he has privillaged information that the Nigerian govt will remove fuel subsidy after 2015 elections, the wise thing to do is to site the refinery in Ghana.

Those elements in the opposition know the truth but will deceive gullible Nigerians with hate filled lies and deliberate we-must-pull-the-Jonathan-government-down-at-all-cost-syndrome.

The price increase was only 2.5% on average for petrol and diesel.

Fuel subsidy should indeed go but then indexes of development has hardly improved after all the income garnered from the huge oil largese Nigeria has earned.

What is the assurance money from oil subsidies would improve the life of the common man.

Ghana has succeeded in making herself a model to follow in West African politics! It's even surprising that this same measure was taken by Jonathan few years back, we cried foul and call him unprintable names! Now Ghanians are embracing that same measure without crying foul! I strongly believe that many Nigerians are as clueless as ever in the political scheme of things!

BlackBaron: The price increase was only 2.5% on average for petrol and diesel.

Read the report again, there was price increase recently in February. That explains why the current price change is 2% or so. But subsequently, prices will fluctuate with international crude oil price. Also, anyone that builds a refinery in Ghana today will make MASSIVE profit. So why wont Dangote take his money there?

Sincere 9gerian:
Read the report again, there was price increase recently in February. That explains why the current price change is 2% or so. But subsequently, prices will fluntuate with international crude oil price. Also, anyone that builds a refinery in Ghana today will make MASSIVE profit. So why wont Dangote take his money there?

This people don't read reports, they just criticise.

chidindufrank: I was in total support of subsidy removal and would still support it should Mr. President decide to do away with it by tomorrow.

I'm in support of it too,but i protested in January. My placard read; "As long as corruption is idolized,fuel must be subsidized". If subsidy is removed, one person can 'faroquk' the money and NOTHING will happen. So let's place a death penalty on institutional corruption,them subsidy can be removed.

Ya'll need to convert your cars to use gas and fuel so that you don't bother yourself on this subsidy thing, its called CNG Conpressed Natural Gas. Its very economical(more than 4x)Far better than fuel and your car can switch to both.

#Good advice

e dey be keke.

nenergy:
I'm in support of it too,but i protested in January. My placard read; "As long as corruption is idolized,fuel must be subsidized". If subsidy is removed, one person can 'faroquk' the money and NOTHING will happen. So let's place a death penalty on institutional corruption,them subsidy can be removed.

I concur

Oya, President Retardeen of Nigeria.......scrap fuel subsidy sharp sharp!

More troubles for Nigeria, our cheap fuel will certainly find its way to Ghana. Fuel scarcity looms, our borders are porous. I hope we wouldn't endup being penny wise but pound foolish by our rejection of subsity removal because I don't trust our borders and fuel can't be sold at almost half the price our neighbours sell and you expect the product to be consumed by Nigerians alone.

Nigeria's hdi remains low inspite of huge oil earnings. Where is the assurance that the extra diverted from subsidies would make a lot of difference?

If the government is serious about cutting subsidies, they should also cut down on government salaries in kind too.

Double post

nenergy:
I'm in support of it too,but i protested in January. My placard read; "As long as corruption is idolized,fuel must be subsidized". If subsidy is removed, one person can 'faroquk' the money and NOTHING will happen. So let's place a death penalty on institutional corruption,them subsidy can be removed.

I disagree with you. Corruption and fuel subsidy issue are walls apart. Yes, there 's corruption in the fuel subsidy scheme but corruption is not fuel subsidy and fuel subsidy is not corruption. Even the corruption in the fuel subsidy scheme can be solved IMMEDIATELY by removal of the fuel subsidy.

Corruption itself has been with us since the 60s so waiting for it to be eliminated before doing the right thing in other sectors is like waiting forever.

The right thing to be done in the down stream petroluem sector is scrapping of fuel subsidy like Ghana just did. It will lead to building of more and more refineries, job creation and cut down in forex outflow.

If we take the arguement further, does retaining fuel subsidy stop corruption? No. So why should we tie doing the right thing in the petroluem sector to eliminating corruption? This sort of mentality can be likened to a wife who decides to spend lavishly just because the husband is spending lavishly. How does that help the family?

The problem of corruption and fuel subsidy should be analysed on their individual merit and tackled frontally

gregg2: Those elements in the opposition know the truth but will deceive gullible Nigerians with hate filled lies and deliberate we-must-pull-the-Jonathan-government-down-at-all-cost-syndrome.

Nigerians have been resisting the removal of fuel subsidy even during the military era so the january protest wasn't about "pull-the-jonathan-government-down-syndrome." You guys(pro Government) like playing the victim whereas the real victims are those whose resources have been rapedd and plundered by this same government who paid monies to briefcase companies and some they used in financing their election!

Ghana is not 6th largest oil producer of crude oil unable to produce pms for the local population

we must not scrap fuel subsidy just because Ghana did so!.

Removing fuel subsidy is effectively a tax increase on everybody

A country with so much poverty aand yet our elected officials are the highest paid in the world has no business increasing taxes.

If our Government want to save money, they can reduce the size of Government and reduce the wages of Government officials, expecially the NASS!!!!!

take dat: Nigerians have been resisting the removal of fuel subsidy even during the military era so the january protest wasn't all about "pull-the-jonathan-government-down-syndrome." You guys(pro Government) like playing the victim whereas the real victims are those whose resources have been rapedd and plundered by this same government who paid monies to briefcase companies and some they used in financing their election!

That is not correct. What past govt did were fuel price hike not complete removal of fuel subsidy. What the govt tried to do in Jan 2012 was complete removal of fuel subsidy, not just fuel price hike. Though because of the resistance the govt eventually only increased fuel price.

Again, none of the past govt tried to sensitize the people about the need for removal of subsidy like the GEJ govt did. In fact, not only that, the govt packaged what it will do with savings from the removal of subsidy under SURE-P. But what did GEJ get in return? Massive protests unknown in the history of this country. Protest championed by failed and opposition politicians, and ethnic warlords.

Sincere 9gerian:
That is not correct. What past govt did were fuel price hike not complete removal of fuel subsidy. What the govt tried to do in Jan 2012 was complete removal of fuel subsidy, not just fuel price hike. Though because of the resistance the govt eventually only increased fuel price.

Again, none of the past govt tried to sensitize the people about the need for removal of subsidy like the GEJ govt did. In fact, not only that, the govt packaged what it will do with savings from the removal of subsidy under SURE-P. But what did GEJ get in return? Massive protests unknown in the history of this country. Protest championed by failed and opposition politicians, and ethnic warlords.

It is a crime against humanity, to sell fuel the same price both at Port Harcourt and Borno!
For the economy to grow, we must allow the market forces to determine the prices of petroleum products.

Sincere 9gerian:
Read the report again, there was price increase recently in February. That explains why the current price change is 2% or so. But subsequently, prices will fluctuate with international crude oil price. Also, anyone that builds a refinery in Ghana today will make MASSIVE profit. So why wont Dangote take his money there?

In february, Ghana increased fuel price by 15% whereas Nigeria increased theirs in January to roughly over 100% before it was brought down due to the protest. And even now that they have decided to remove the entire subsidy, the price increase is just by 2.5% even if the international prices of crude oil goes the increase won't be more than 3%. You can do the maths by yourself to know why Nigerians resisted the overnight hike in fuel price by 100%. Some have argued in favour of partial subsidy removal at intervals provided government is willing to take steps in providing palliatives and reducing corruption in the scheme. I believe Nigerians are not against the full deregulation of the downstream sector but government needs to get its act right!

mikeansy: Ghana is not 6th largest oil producer of crude oil unable to produce pms for the local population

we must not scrap fuel subsidy just because Ghana did so!.

Removing fuel subsidy is effectively a tax increase on everybody

A country with so much poverty aand yet our elected officials are the highest paid in the world has no business increasing taxes.

If our Government want to save money, they can reduce the size of Government and reduce the wages of Government officials, expecially the NASS!!!!!

Why cant we deal with issues on their merit. Yes, the cost of governance is high but the solution to cutting down cost of governance is not in retaining fuel subsidy. The part of the solution to cutting down cost of governance is that it must be consistently be on the front burner of national discourse. We must continue to talk about it and if possible organise protests. It should be an issue during political debates.

Ghana already has relative stable electricity which we can safely put at 70% so removing subsidy is not so bad an idea. In Nigeria's case electricity efficiency is about 20% so removing subsidy will be a declaration of war on the people.

PS: No light in ALUU

take dat: In february, Ghana increased fuel price by 15% whereas Nigeria increased theirs in January to roughly over 200% before it was brought down due to the protest. And even now that they have decided to remove the entire subsidy, the price increase is just by 2.5% even if the international prices of crude oil goes the increase won't be more than 3%. You can do the maths by yourself to know why Nigerians resisted the overnight hike in fuel price by 200%. Some have argued in favour of partial subsidy removal at intervals provided government is willing to take steps in providing palliatives and reducing corruption in the scheme. I believe Nigerians are not against the full deregulation of the downstream sector but government needs to get its act right!

I dont think we should tell lies on this issue. Ghana increased fuel price by 20% and diesel by 50% in February this year.
https://www.nairaland.com/1199648/ghana-removes-fuel-subsidy-price
Recall they also increased fuel price in 2012 or late 2011. In January 2012, Nigeria increased fuel price by about 120% (N65 to N141 or thereabout)

Sincere 9gerian:
That is not correct. What past govt did were fuel price hike not complete removal of fuel subsidy. What the govt tried to do in Jan 2012 was complete removal of fuel subsidy, not just fuel price hike. Though because of the resistance the govt eventually only increased fuel price.

Again, none of the past govt tried to sensitize the people about the need for removal of subsidy like the GEJ govt did. In fact, not only that, the govt packaged what it will do with savings from the removal of subsidy under SURE-P. But what did GEJ get in return? Massive protests unknown in the history of this country. Protest championed by failed and opposition politicians, and ethnic warlords.

I beg to disagree with you sir. The bottom line is that Nigerians have always resisted an increase in prices of petroleum products not to now talk of total removal of subsidy right from the days of IBB.

You claim the Jonathan government tried to sensitize Nigerians on the need for subsidy removal, even when the ministers of finance and petroleum could not categorically state the average daily consumption of petroleum products? Even when these same ministers paid out huge sums of money to briefcase companies without verification, yet these same ministers are still occupying their positions in government. When some of those ministers through proxy owns some of those companies! So you expect Nigerians to trust the government even after knowing all these? What is the difference between the SURE programme and Abacha's PTF? Smh!