FUEL PRUCE INCREASES TO SAVE ECONOMY (Pg 31) 10-06-09

Story: Kofi Yeboah
THE Minister of Energy, Dr Joe Oteng-Agyei, says the recent increases in the prices of petroleum products are to save the national economy from collapse.
He said although the National Democratic Congress (NDC), as a social democratic party, was concerned about the welfare of the people, the total national debt inherited by the Mills administration was so huge that subsidising the price of petroleum products would be disastrous for the national economy.
"We all have to bear with the government in the short term. In the long term, we will decide, as a social democratic party, on something to reduce the pressure," the minister told the Daily Graphic.
Without giving exact figures, Dr Oteng-Agyei said the national debt portfolio which the government inherited from its predecessor in January 2009 had enlarged as previously unknown debts trickled in from various sources.
He said his ministry, for instance, had a debt of about GH¢126 million, involving commitments to local contractors for work done on the extension of electricity to rural areas, some of which debts had been outstanding since 2003.
In addition, the Tema Oil Refinery (TOR) had a debt of about GH¢114.6 million (¢1.146 trillion), all of which had to be offset by the government.
He said failure by the government to clear the TOR recovery debt or fulfil its financial commitments to oil marketing companies (OMCs) could lead to shortage in the supply of petroleum products, since the OMCs might not have the financial capacity to import crude.
Currently, TOR supplies about 60 per cent of the country’s petroleum consumption, while the OMCs make up for the remaining 40 per cent.
Recently, the government has come under intense pressure from sections of the public, particularly activists of the largest minority party, the New Patriotic Party (NPP), and the Committee for Joint Action (CJA), a political pressure group, to reduce the prices of petroleum products in fulfilment of the NDC’s campaign promise, describing the recent price increases as a breach of faith.
The reduction in the prices of petroleum products was a major campaign promise made by the NDC in the run-up to the December 2008 elections but since assuming office last January the prices have increased intermittently, with the latest being last weekend’s 30 per cent increase in prices.
Dr Oteng-Agyei disagreed with the critics, contending that the NDC had, indeed, fulfilled its campaign promise by taking off various taxes on the petroleum price build-up soon after assuming office, which essentially reduced the ultimate price of petroleum products.
He said the NDC had been justified in calling on the then ruling NPP government to reduce the prices of petroleum products because at that time there was a slump in the price of crude oil on the world market.
Therefore, the minister argued, the critics of the government could only be justified in their assertion if the government did not reduce the prices of petroleum products to reflect a reduction in the price of crude oil on the world market.
On the current intermittent power cuts, Dr Oteng-Agyei said the problem was due to the fact that most of the sub-stations were old and cited the Achimota Sub-station, which was about 40 years old.
He said there was the need to change equipment at all the sub-stations but the problem was that anytime work was being done on one station, the weakness in other stations emerged, resulting in the power cuts.
Dr Oteng-Agyei urged the institutions responsible for electricity generation and supply to communicate the difficulties well to the public because "it is not acceptable to always wait for electricity to go off before coming out to say it’s a technical problem".
"We are really working to take the public out of this situation," he assured the nation, adding that the reinforcement programme on the sub-stations would be completed by the end of December 2009.