President Kufuor is expected to make a major announcement on the economy on Thursday.

The President's live broadcast to the nation, which is provisionally scheduled for 8:00pm tonight according to The Statesman will mention specific interventions aimed at reducing the cost of some petroleum products and some imported foods.

The Statesman says the taxes on kerosene, diesel and pre-mix fuel will all be reduced.

Kerosene is used mainly by the poorer people in society. This relief measure is directly aimed at reducing the impact of rising crude oil prices, which have registered six-fold since 2002, nearing the $130 per barrel mark yesterday.

With the price of crude oil projected to hit as high as $200 per barrel before the end of the year, this relief measure could end up costing the Ghanaian treasury about $700 million this year.

Though no direct fault of the Ghanaian government, it has been, however, compelled by the biting social cost of the global food crisis, triggered by high oil prices, to do something for Ghanaian consumers.

In further acknowledgment of the debilitating effect of the rising crude oil prices and the escalating cost of food on the economy, the Monetary Policy Committee of the Bank of Ghana on Monday revised projections for single digit inflation by the close of this year, saying, "It is not possible".

Consequently, the Monetary Policy Committee of the Bank of Ghana pegged the Prime Rate at 16 percent from the previous rate of 14.25 per cent.

Central Bank Governor Dr Paul Acquah, who announced this at a news conference in Accra, said "Given the shocks in the system, the horizon has to be extended beyond this year."

"Inflation and cost price pressures have increased amidst rising and volatile oil prices, and a surge in food prices. And, uncertainty about developing inflation has weighed down business and consumer confidence, while the general assessment of economic prospects remains strongly positive," the Central Bank boss said.

The rising costs of living across the world have become food for opposition parties' propaganda menu, from Ghana to the USA.

The intervention on the ex-refinery price of diesel is geared against the rising cost of public transport, which invariably affects the prices of goods and services, generally.

Pre-mix fuel is also targeted to assist the local fishing industry.
The relief measures shall also affect imported rice and certain selected items. Government is expected to relax import duties on rice, which has seen its price on the international market doubled this year.

A senior government source told The Statesman that government is demanding assurances from the major importers that the relief in rice duties will be directly passed on to consumers.

The presidential announcement was expected yesterday, but a Castle source said, consultations with stakeholders "had not been completed."

One school of thought had been for government to financially empower the Ghana National Procurement Authority as a temporary measure to import and distribute rice in large quantities, as a better way of guaranteeing low prices.

But, the idea, seen as a 'controlled price' measure, could not sit well with a government that prides itself on private sector development.

Crude-oil futures broke to new highs early Tuesday amid worries that increased production by Saudi Arabia won't be enough to appease demand.

The June crude contract, which expires at the end of trading today, rose $1.28 at $128.33 a barrel on the New York Mercantile Exchange, after hitting a new high of$128.41 earlier on.