Economy

CEPA Director backs fuel prices hike

  5 January 2011 5:00am
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The Executive Director of the Ghana Centre for Policy Analysis (CEPA), Dr Joe Abbey, has stated that the government cannot solely churn out its resources to subsidize crude oil while relegating the infrastructural development of the country.Dr Abbey was reacting to calls from the public that government should continue to subsidize crude products.Speaking on Joy FM’s Business Trends, Dr Abbey said the government had already shown its commitment in relieving Ghanaians of some burden by subsidizing kerosene and premix fuel, which had been factored into the 2011 budget, but said subsidizing all crude products would mean the government would not be able to invest in other areas of the economy.“We’ve got to build our capacity, we’ve got to complete the roads that are sitting down there uncompleted and bring them into productive use.“We’ve got to bring interest rates down and save us those costs there...the cost of transportation is not just because of fuel price increases, [but] the cost of transportation is also because of bad roads,” he indicated.He added that Ghanaians had to accept the fact that the oil price hike was beyond the country’s capacity and it was time for Ghanaians to brace themselves for the reality of the situation.Dr Abbey said that history had shown that the inability of the country to deal realistically with rising oil prices had brought in huge debts at the Tema Oil Refinery (TOR), which almost inadvertently crumbled Ghana Commercial Bank (GCB), the bank that had been lending money for the subsidies."Last year, [in] 2010, the government had to clear GH¢455 million of debt that had been sitting on TOR’s books owed to Ghana Commercial Bank (GCB), which almost brought the Ghana Commercial Bank on its knees,” he said.Sydney Casely-Hayford, a financial consultant, also on the programme, said it was important for the country to find solutions to the growing concerns of rising crude oil prices.He stated that TOR’s debts would remain for a very long time, no matter the efforts made at clearing it, and that there was the need to hold consultative discussions to see how best to resolve it in order for the government to focus more on developing the nation.Story by Fidel Amoah/Myjoyonline.com/Ghana

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