Government is considering fresh interventions to cushion consumers from rising fuel prices as escalating tensions in the Persian Gulf threaten to trigger another round of economic pressure on Ghana.
Industry projections indicate that petroleum prices could increase by between 2.5 percent and 3 percent from May 16 under the second pricing window for the month, despite temporary relief measures introduced in April.
According to estimates from the Chamber of Oil Marketing Companies (COMAC), petrol prices could rise to about GH¢14.50 per litre if government maintains the current cushioning measures. Without the intervention, however, petrol could climb to nearly GH¢15.80 per litre while diesel prices may exceed GH¢18 per litre.
The anticipated increase follows a renewed spike in global crude oil prices after heightened tensions involving Iran, the United States and Israel raised fears of supply disruptions through the Strait of Hormuz, one of the world’s most strategic oil transit routes.
The development presents a difficult policy challenge for government as rising fuel prices threaten to push up transport fares, food prices and overall inflation at a time authorities are attempting to sustain macroeconomic stability.
Sources within policy circles say one option under consideration is the extension of the fuel relief programme introduced in April, under which government temporarily absorbed portions of petroleum-related taxes and regulatory margins.
Energy analysts say extending the intervention may be politically necessary in the short term, especially as consumers continue to struggle with the high cost of living.
However, economists warn that prolonged relief measures could weaken government revenues needed for road infrastructure financing and energy sector debt recovery.
The Institute for Energy Security has urged authorities to adopt targeted levy suspensions rather than broad-based subsidies, cautioning that permanent subsidies could worsen fiscal pressures.
Another proposal reportedly under discussion involves temporary reductions in the Energy Sector Levy and parts of the Special Petroleum Tax to moderate ex-pump prices.
Finance Minister Cassiel Ato Forson is expected to address the issue during the mid-year budget review in July as government balances consumer protection with commitments under Ghana’s economic reform programme supported by the International Monetary Fund.
Analysts also believe the Bank of Ghana may intensify foreign exchange market interventions to support the cedi and reduce the local currency impact of rising international oil prices.
Business groups have already warned that sustained increases in diesel prices could significantly affect transport operators, manufacturers, mining firms and power producers, potentially reversing recent gains in inflation moderation.
By: Toma Imirhe / businesspostonline
