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General News
Fuel price increase unacceptable - ISODEC 2/18/2013

The newly announced increase in the price of petroleum products is causing anger around the country, with a number of public interest groups condemning government’s decision.

Over the weekend, government cut critical subsidies to key petroleum products, forcing the National Petroleum Authority to announce a 20% increase in fuel prices.

Opposing the price increase, ISODEC Campaign Coordinator, Dr Steve Manteaw, said it would have crippling effects on the Ghanaian economy.

“It is a very bad idea and I think we need to, as a country, take a look at a number of things because what we have done today will negatively impact on the economy and we are going to roll back the progress we have made in the macro economic sphere…when prices go up, workers are going to begin to agitate for wage increases and there will be a spiral impact on the rest of the economy,” he stated.

Mr. Manteaw said: “We have gotten to where we are today because of lack of fiscal discipline. One of the things we expected government to do was to look at its own budget because this rise in fuel prices will affect government budget as well because government depends heavily on fuel.

“We haven’t really addressed the issues that mitigate against the exact impact therefore, government should with immediate effect look at how to mitigate the impact otherwise two or three months along the line, we are going to see a roll back of all the progress we’ve made in the macro economic sphere."

The government has repeatedly explained that it needed to cut subsidies on petroleum products due to a mix of factors, including the huge budget deficit it run last year.

Dr Manteaw said the blame must be laid partly at the door steps of the Mahama administration.

“If government thought it prudent to do it, why didn’t he do it before the election? Why do you wait till after the elections before you withdraw subsidies?," he said.

“We might have spent more during the electioneering period and this could contribute to the fiscal squeeze we are facing today…..the Bank of Ghana indicates that we have a huge deficits…deficits should be expected if there aren’t adequate donor inflows, you are not also prudent with expenditure and there is a lot of weight and inefficiency in the system so we need to look at prudent measures to address the waste in the system rather than withdrawing subsidy and thinking the problem gets resolved."

 
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