A meeting between the National Petroleum Authority and Bulk Oil Distribution Companies over fuel subsidies has ended in a deadlock. 

The two parties met Wednesday to discuss the cost of fuel subsidies. Government was pushing that the oil distributing companies absorb some of the subsidies.

The oil importers have refused.

Government initiated steps to remove fuel subsidies in 2013 and to allow consumers to pay what government described as realistic prices.

The prices of petrol, kerosene, diesel and LPG saw rises of between 15% and 50% until there was full cost recovery rin mid-September 2013.

According to the 2013 Regional Economic Outlook for Africa, fuel subsidies would have cost 1.4billion cedis (or 1.2billion USD) if government had not removed subsidies.

This figure, the report said represented more than half of Ghana’s 2013 budget for education.

A UNICEP report on Ghana found that almost 78% of fuel subsidies benefited the wealthiest with less than 3% of subsidy benefits reaching the poorest.

The  richest  quintile  of  the  population  received  15.86  GHS  per  year  from  the  fuel  subsidies  per  capita,  while  the  poorest  received  just  2.23  GHS  per  capita

With budget deficit at 12% of GDP after 2012, government is on a cost-cutting exercise to reduce its debts.

But removal of subsidies according to the same report predicts that 395,180 Ghanaians would be pushed further into poverty and a reduction of consumption by 2.1% in Ghana’s poorest homes.

It would also affect Ghana’s MDG target on reducing poverty.

An automatic adjustment formula brought in to determine the price triggered strong public reaction because the prices for petroleum products kept increasing to levels some felt were harsh.

Government brought back subsidies in April 2014.  By the second quarter of 2014, government spent USD85 million in fuel price subsidies.

Ghana has now entered into what some industry players say is the final phase of deregulation.

Deregulation began Tuesday 16 June 2015 with fuel prices going up by 4%.

Oil Marketing Companies are now set to dictate the price of petroleum products.

The new move is expected to create competition because fuel stations can sell at different prices.

The cost of subsidies accrued since 2014 has not been confirmed. But it is still a burden government will need to clear.