President Akufo-Addo says reducing taxes on petroleum products will not be in the interest of the nation.

He said the suggestion was not a sustainable one because, “removing taxes on petroleum products will reduce Government revenues by some four billion cedis (GHC4 billion).”

Addressing organized labour at this year’s May Day celebration at the Independence Square in Accra, the President said “At this time, when we are determined to expand Government revenues to increase our capacity to finance our own development, can we afford to reduce tax revenues by four billion cedis (GH¢4 billion)?

The President was responding to a request by the Secretary-General of the Ghana Trades Union Congress, Dr Yaw Baah, for the government to suspend all taxes and levies on petroleum products, to mitigate the current economic hardship facing Ghanaians because of hikes in fuel prices, food commodities, and transport fares.

President Akufo-Addo said the Government was currently confronted by very tight financing conditions, in the wake of inadequate domestic revenue mobilization.

“Indeed, some of the revenues from these same taxes on petroleum products is what is used to pay some of the salaries of some of the 700,000 public sector workers on Government’s payroll.”

The President announced that the government was addressing the issue of fuel price increases by implementing measures that are succeeding in stabilising the exchange rate, which is a key determinant of fuel prices.

He said that Government was also working hard to ensure reliable supply and availability of petroleum products to prevent shortages being experienced in some neighboring countries.

President Akufo-Addo reminded Ghanaians that even though the nation was a modest producer of crude oil, with a current output of 148,000 barrels per day, “we are still a net importer of petroleum products.

“We, therefore, continue to be vulnerable to the price volatilities of the world market for petroleum products.”

The President however, said intense efforts were underway to rehabilitate the Tema Oil Refinery, to enable it to contribute to stabilise petroleum prices, which he hoped would soon materialize.

He also disclosed that the government was encouraging private companies to establish refineries in the country, one of which was 80 per cent complete and expected to be commissioned before the end of the year.