Labour organizations in the country say they find no economic or social justification for the recent upward review of fuel prices by the National Petroleum Authority.
“Given the rapid fall in the value of the Cedi, the Organized Labour maintains that the current pricing formula for fuel punishes consumers and must be reviewed” a press statement released Tuesday said.
The organizations include the Trades Union Congress (TUC), Industrial and Commercial-workers Union (ICU), Ghana National Association of Teachers (GNAT), Civil and Local Government Staff Association of Ghana (CLOSSAG), Ghana Medical Association (GMA) and Ghana Registered Nurses Association (GRNA).
Although there have been calls on government by think tank, IMANI Centre for Policy and Education for the removal of fuel subsidies, Organised Labour maintains “given the prevailing economic challenges in the country and the high cost of living, a subsidy regime on petroleum products is necessary”.
According to them, subsidies are necessary to shield majority of the population that are on fixed incomes or receive no regular incomes from further hardships.
“Organized Labour reiterates our earlier advice to government that there is a limit to what workers and their families can take. The decision by the NPA and government to increase the ex-pump prices of petroleum products at this time, is to say the least, insensitive”, the statement said.
Below is the full statement:
PETROLEUM PRODUCTS PRICE HIKES, ECONOMIC MANAGEMENT AND HIGH COST OF LIVING
Organized Labour has noted with shock and total disbelief, the astronomical increases in the ex-pump prices of petroleum products announced by the National Petroleum Authority (NPA). The ex-pump prices of Premium and LPG have been increased by 23.08 percent and 15.68 percent, respectively. These increases have far-reaching effects on prices of a wide range of goods and services. And they are coming at a time when Ghanaians are faced with very difficult economic conditions.
These astronomical price hikes have become the hallmark of government and governance. Since January 2013, the ex-pump price of premium has been increased by 96.72 percent. From January 1 to July 14, 2014, the ex-pump price of premium has been increased by 44.21 percent and we are only halfway into the year.
We do not want to believe that government views governance only as passing on increasing prices, taxes and charges to the Ghanaian people without any way of gauging the impact of such increases on our wellbeing. If that were the purpose of governance then it would not be worth the expenditure incurred for its purposes. The prices of petroleum products are reaching unaffordable levels for many Ghanaians. This is the year when government could not increase salaries yet it has the confidence to pile these stellar increases on Ghanaians.
Organized Labour finds no economic or social justification for the upward spiral in the prices of petroleum products that the NPA and government continue to force down the throat of Ghanaians. Given the rapid fall in the value of the Cedi, the Organized Labour maintains that the current pricing formula for fuel punishes consumers and must be reviewed. The exchange rate has now become a key driver of petroleum products price increases.
It is simply unfair for Ghanaians to be compelled to pay higher for fuel whenever government, by its policies, mismanages the exchange rate. With the rapid depreciation of the Cedi, the continued indexation of fuel prices to the dollar/cedi exchange rate is no longer tenable. The fuel pricing formula has outlived its usefulness. We expect, the managers of the economy, to come up with a better and more efficient way of implementing the fuel-pricing system. The current system of passing on the resultant losses in exchange rate depreciation to Ghanaians is insensitive and unsustainable. Government can do better.
We maintain our position that given the prevailing economic challenges in the country and the high cost of living, a subsidy regime on petroleum products is necessary. It is necessary to shield majority of the population that are on fixed incomes or receive no regular incomes from further hardships. Our economy is structured in such a way that the impact of these hikes are largely felt in ‘trotro’ fares and in market prices of goods and services rendering as baseless, the assumption that fuel subsidies benefit the rich to the exclusion of the poor. Besides, most of the rich have free fuel from their employers or organizations anyway.
Organized Labour reiterates our earlier advice to government that there is a limit to what workers and their families can take. The decision by the NPA and government to increase the ex-pump prices of petroleum products at this time, is to say the least, insensitive. Clearly our government has lost touch with or failed to appreciate the economic and social difficulties and hardships of many of our compatriots. By its actions, government is further distancing itself from the concerns of the people. The announced increases would only aggravate the hardship and misery many Ghanaian families are going through.
In the coming days, Organized Labour working with other stakeholders, would use all legitimate means to express in the strongest possible terms, our disapproval of, not only, the current pricing regime for fuel and other utilities but equally and importantly, on the prevailing economic and social conditions.
KOFI ASAMOAH (TUC)
MORGAN AYAWINE (ICU)
B. K. OSEI (GNAT)
J. N. O ANKRAH (CLOSSAG)
KWABENA OPOKU ADUSEI (GMA)
JULIANA KUATSINU (GRNA)
July 14, 2014
GNAT Hall, Accra