Chief Executive Officer of United Bank for Africa (UBA) Ghana Abiola Bawuah has endorsed the National Petroleum Authority’s (NPA) incorrigible stance to stay fuel prices, despite the world market price of crude oil falling to its lowest in five years.
She said the debt level of petroleum dealers to banks is a good reason for government to at least maintain the current fuel prices at the pumps, explaining that since Ghanaians have enjoyed subsidies over the years and the government has outstanding debts owed to the Bulk Oil Distribution Companies (BDCs), which must also pay their banks, it should maintain the prices at their current levels.
“When prices were going up on the world market we were not buying it at a higher price at the pumps due to the subsidies from the government. So if there is a fall, let’s pay the backlog.
“Also, the world market prices will not fall forever; the price will go up again, so it is better we leave it as it is so it becomes a cushion in case the world market prices rise again,” she said.
International benchmark Brent crude has roughly halved since reaching a 2014 high of US$115 a barrel in June due to ample supply and slowing demand, and a switch in strategy by exporter group OPEC to defending market share rather than prices.
Brent crude, as at yesterday morning, gained by US$1.06 dollars to reach US$62.33 a barrel while US crude also gained by US$1.15 to reach US$57.53 a barrel.
These gains were made after Brent crude went down by US$2.10 to US$58.96 a barrel during Tuesday New York trading. Brent’s low of the session was US$58.50 — a level it has not touched since June 3, 2009 when it dipped to US$58.41.
U.S. crude also fell on Tuesday by US$1.82 to US$54.09 a barrel after trading at a session low of US$53.72, the weakest level since May 4, 2009 when it reached US$52.56.
The NPA, at its bi-weekly meeting to review the prices of petroleum products, earlier this week maintained the price of fuel at the pumps for at least the next two weeks — a decision that has received wide public criticism.
Petrol continues to sell at GH¢3.39 per litre; diesel at GH¢3.30; kerosene at GH¢3.25 and Liquefied Petroleum Gas (LPG) at GH¢2.94 per kilogramme.
The NPA said it decided against reducing petroleum prices because it wants to take advantage of the price drop to save money to defray the debt owed the BDCs, and could possibly reduce it next year.
Speaking on the sidelines of the launch of some of UBA’s new and upgraded e-products, Mrs. Bawuah added: “The government is trying to manage its expenses”.
The products launched include cards, upgraded ATM services, U Direct, web payments, POS and U Mobile