Ghana removes fuel subsidy, creates special funds for refineries

The Ghanaian government has removed fuel subsidy in a bid to stabilise its downstream sector and reduce funding pressure on authorities.

This was revealed on Wednesday by the Chief Executive Officer of Ghana National Petroleum Authority (NPA), Abdul Hamid, who said the government was finding it difficult to raise capital meant for funding subsidies.

Speaking during a presentation at the Africa Refiners and Distributers week 2023, in Cape Town, South Africa, Hamid said industries are shutting down due to a lack of subsidy funds.

The Ghanaian oil and gas industry was regulated previously, with the government controlling the price cap through subsidy payments and preventing companies from dictating the market price.

However, with crude oil prices rising and the government’s inability to fund the costly product, Hamid said the government has implemented some regulatory measures which include the removal of subsidy.

“We have removed subsidies and deregulated our markets. Industries were shutting down because the government was finding it hard to find the money to provide subsidies and to this day industry is being powered by investments in the private sector and there are no complaints of supply.

Read also:‘No matter how Nigerians protest, I will remove fuel subsidy if elected’ —Tinubu

“We are ensuring affordability and security for the vulnerable consumers through the removal of energy subsidies,” he said while speaking on more reforms implemented in the NPA.

Hamid blamed the struggles of the oil industry on the Russia-Ukraine war which has disrupted global oil distribution and raised oil prices in the international market.

The CEO of the National Petroleum Authority also revealed that the Ghanaian government plans to raise the capacity of its refineries to 50 barrels of oil, and a special fund has been created to ensure this.

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