The Alliance for Accountable Government (AFAG) has expressed shock at the decision by the National Petroleum Authority to increase petroleum prices. The group says this portends how the “2012 politico-socio-economic governance of the NDC will pan out.”

The new prices of petroleum products, which went up between 15 and 20 percent, took effect today, Thursday 29 December, 2011.

The increases according to the National Petroleum Authority are influenced by the government’s decision to withdraw subsidies on the products from next year. The increase is thus expected to reflect the current world price of about $107 dollars.

But AFAG says the recent hikes show how incompetent the government is. In a statement signed by some leading member s of AFAG, the group said:

“The price increase is not justified and that the only alternative for us in AFAG and Ghanaians at large in this call is for Government and the NPA, to as a matter of urgency withdraw the increases in prices on all petroleum products else AFAG would take the necessary action to fight for the good course of Ghanaians.”

The group said, the NDC government seems to make it a habit of increasing fuel prices during the festive season as was the case on January 3, 2011.

“Obviously, times are bad for the ordinary Ghanaian. The failure to pay December salaries of public sector workers had already dampened the Christmas celebration and to hit the nation with this price hikes smacks of hypocrisy and the so called ‘better Ghana agenda’ of the NDC Government led by Professor Mills.”

According to the statement, the excuse that the increase is a response to the rise in international crude price is untenable. They want government to explain what happened to the policy of hedging as well as the anticipated GHS1.2billion from the oil revenue as stated in the mid-year review of the 2011 budget statement.

Against Ghana’s Constitutional Order

Kweku Kwarteng, a member of the NPP who won a case against the NPA over the introduction of the Ex-Refinery Differentials into petrol pricing is also appalled by the price hikes. He believes this contravenes the nation’s constitution.

“Whiles the NPA is asking the court to exercise restraint and allow them time to do the appeal, the NPA didn’t exercise restraint. They have gone ahead to increase fuel prices… It appears to be a deliberate decision by government to undermine the court. Government and the NPA seem to have come to the conclusion that they will not comply with the court orders,” he lamented.

He said the government ought to have waited for the appeals court to make a pronouncement on the case before going ahead with any increment and that government’s posture “is against our constitutional order.”

According to Mr Kwarteng, the new prices still have the Ex-Refinery Differential, a situation which renders the decision of the court ineffective.

Kwarteng’s ‘Ignorance’

But deputy Minister of Energy, Inusah Fusieni insist Mr Kwarteng does not understand the issues at stake. He said the NPA, by law, has a mandate to ensure that the sector is regulated and that the court’s ruling is inconsequential to the decision to increase petrol prices.

He said the government was not going to make similar errors as the Kufuor administration in 2008.

“Government is supposed to be responsible and ensure that they manage the economy in such a way that they don’t put untold hardship on the citizens of Ghana. Government does not want to repeat the problems of 2008 where about GHS 1.5 billion was marked up by reason of the activities of the previous government in managing the petroleum sector.”

He stressed that the government is working to ensure that the import parity and the depreciation of the cedi does not adversely affect the importation of crude oil into the country.

Read the full statement below