Back Page, lead, (Daily Graphic), December 24, 2008
Story: Charles Benoni Okine
THE government has approved $100 million to revamp the agricultural sector in the three northern regions.
The money will be used for the acquisition of tractors and other agricultural equipment, as well as seedlings, for farmers in the three regions to enable them to cultivate crops in large quantities for export and local consumption.
The Vice-President, Alhaji Aliu Mahama, announced this when he met the chiefs and people of Tumu in the Upper West Region.
His visit formed part of a campaign tour to whip up support for the presidential candidate of the New Patriotic Party (NPP), Nana Addo Dankwa Akufo-Addo.
He said the government appreciated the concerns of the people of the northern regions and was prepared to assist them in any way possible to alleviate poverty.
Alhaji Mahama, who was met on arrival in the town by an enthusiastic crowd of party supporters, said, “We know your problems and we have, since 2001, been working hard to ensure that we bridge the gap between the north and the south by bringing development to the people of the three regions.”
The Vice-President said the achievements of President Kufuor in the northern regions were evident and that Nana Akufo-Addo would help accelerate the development process there, adding that Nana Akufo-Addo had promised to set up a $1 billion Northern Development Fund when voted into power and asked the people not to miss the opportunity.
He said apart from the fund, the government, when maintained in power, would also devote funds from the Consolidated Fund to support the development projects needed to transform the northern regions.
At Sandema, the Vice-President called on the paramount chief and party supporters who had gathered at a mini rally to hear the message of the ruling government.
He told the people that the school feeding programme would be extended nation-wide should Nana Akufo-Addo be voted into power.
Alhaji Mahama said the government had also sourced funds to build a mini dam at Pwalugu to provide electricity for most parts of the north.
He said the NPP had learnt its lessons and expressed the hope that those mistakes would not be committed in the run-off.
The Vice-President, who will return to Accra on Saturday, December 27, will visit the Nadowli East, Wa East, Sawla and Damongo constituencies and move to the Volta Region, where he will pay courtesy calls on chiefs in Krachi, Nkwanta, Hohoe and Sogakope.
December 24/2008
Sunday, December 28, 2008
Friday, December 19, 2008
Ballot Papers in Tomorrow
Front (lead) (Daily Graphic) December 19/2008
Story: Charles Benoni Okine
Ballot papers to be used in the December 28 presidential run-off are to be released by the printing firms to the Electoral Commission (EC) on Saturday.
The EC has said that immediately after taking delivery of the papers, it will release the required number to the centres where special voting is expected to be held on Tuesday, December 23 for members of the security agencies, the media and others.
The Director of Elections, Mr Albert Kofi Arhin, told the Daily Graphic that on the ballot papers, the presidential candidate of the ruling New Patriotic Party (NPP), Nana Addo Dankwa Akufo-Addo, would maintain his number one position, while Professor John Evans Atta Mills would automatically move up from the third to the second position.
Mr Arhin said five printing houses were printing the ballot papers locally and expressed the hope that delivery would be prompt on Saturday.
On the other materials such as indelible ink, among others, he said everything was on course and that the EC did not anticipate any problem in that direction.
Mr Arhin said the commission had also heeded the request for more polling stations.
He said at polling stations where there were more than 2,000 voters, “we will split them into ‘A’ and ‘B’ to allow for shorter queues and faster voting”.
During the December 7 general election, long queues were seen at many polling stations and that forced many to stay in the queues for longer hours, while at other areas voting time was extended from the 5 p.m. closing time for more than two hours.
Mr Arhin said the EC had taken note of all the hiccups that occurred in the last elections and had done its best to remedy them to ensure a smooth run-off.
Story: Charles Benoni Okine
Ballot papers to be used in the December 28 presidential run-off are to be released by the printing firms to the Electoral Commission (EC) on Saturday.
The EC has said that immediately after taking delivery of the papers, it will release the required number to the centres where special voting is expected to be held on Tuesday, December 23 for members of the security agencies, the media and others.
The Director of Elections, Mr Albert Kofi Arhin, told the Daily Graphic that on the ballot papers, the presidential candidate of the ruling New Patriotic Party (NPP), Nana Addo Dankwa Akufo-Addo, would maintain his number one position, while Professor John Evans Atta Mills would automatically move up from the third to the second position.
Mr Arhin said five printing houses were printing the ballot papers locally and expressed the hope that delivery would be prompt on Saturday.
On the other materials such as indelible ink, among others, he said everything was on course and that the EC did not anticipate any problem in that direction.
Mr Arhin said the commission had also heeded the request for more polling stations.
He said at polling stations where there were more than 2,000 voters, “we will split them into ‘A’ and ‘B’ to allow for shorter queues and faster voting”.
During the December 7 general election, long queues were seen at many polling stations and that forced many to stay in the queues for longer hours, while at other areas voting time was extended from the 5 p.m. closing time for more than two hours.
Mr Arhin said the EC had taken note of all the hiccups that occurred in the last elections and had done its best to remedy them to ensure a smooth run-off.
Presidential Transition Bill launched
Spread (Daily Graphic) December 18/2008
Story: Kobby Asmah & Charles Benoni Okine
The Presidential Transition Bill, 2008, which aims at further deepening and consolidating multiparty democracy in Ghana has been launched in Accra.
The bill, among other issues, seeks to establish a durable and harmonious way of transferring political authority from one constitutionally elected government to another, as well as forge national cohesion, lower the political tension and promote inter-party co-operation.
The bill, which is a product of an elaborate consultative process of study, findings, recommendations, discussions, validation and re-drafting, will also help to regulate and streamline the transition process.
The bill is a one-and-a half year collaborative effort of a multipartisan group made up of members of the Institute of Economic Affairs, in collaboration with the Ghana Political Parties Programme (GPPP), an inter consultative group comprising the four political parties with representation in Parliament — New Patriotic Party (NPP), National Democratic Congress, People’s National Convention and the Convention People’s Party (CPP).
The bill also takes a cue from the political transition in 2001, which represented a political first in the history of post-independent Ghana, where political power was transferred from one political party to a different political party.
The General Overseer of the International Central Gospel Church (ICGC), Reverend Dr Mensah Otabil, who launched the 28-page document, said; “We need a law on political transitions in this country to define the dos and don’ts for both the outgoing and incoming Presidents.”
The law, he said, was to address for instance, which public officials enter government and leave with the President; How are the handover arrangements on January 7 to be handled; and When is the new Speaker of Parliament to be elected.
Rev Otabil said the law would also bring to the fore how the country could ensure that the new President’s swearing-in ceremony was not unduly delayed, as well as how the country could ensure that Presidential preferences did not become an undue burden on the taxpayer.
He recounted the transition periods before the Fourth Republic and said those transition periods had mostly taken the form of unconstitutional interruptions in the governance arrangements of the country.
“Thankfully, under this current republic, we have had three smooth transitions; even then, two of those transitions have been from one President to himself and, therefore, have not been dogged by any difficulties,” he said.
Reverend Otabil observed that the 2001 transition from the National Democratic Congress (NDC) government to the New Patriotic Party (NPP), however, presented a real challenge, noting that “it was not the smoothest transitions”.
“Research has shown that, that transition has been partly responsible for the extreme polarisation of the Ghanaian society today,” he added.
Prof. Adzei Bekoe, Chairman of the Council of State, in a remark observed that whenever there was a run-off, the time left to declare results and the transition period was not enough to ensure a smooth exercise.
He said there were a lot of work to be done during the transitional process, which required clear ground rules and procedures and, therefore, expressed the hope that the bill would be a useful document for the consideration by the Cabinet and Parliament.
The Chairman of the NPP, Mr Peter Mac Manu, said the NPP believed in the quest to deepen democracy in the country and was gratified that through the launch of the bill, Ghana’s democracy was moving forward.
The bill, he said, would serve as a very good starting point and commended IEA for their bold effort in initiating the document.
Mr Alex Segbefia, who represented the NDC, said the bill gave credence to the fact that “we are capable of managing our own affairs”.
He described the bill as a useful guideline that the NDC could work with, saying “it is good that change is taking place so that we can move forward”.
A statement read for the Chairman of the PNC, Alhaji Ramadan, indicated that the PNC was proud to be associated with the launch of the bill and expressed the hope that the incoming Parliament would look at the issues raised and approve them to help future transitions.
Mr Ivor Kobina Greenstreet, General Secretary of the CPP, recalled that the first transition in 2001 recorded some teething problems because there were no precedent to guide them.
He said if elections were held early in November, it would help to ensure smooth transition and called for a constitutional review to amend the date of election from December 7 to November 7.
Brigadier General Francis Agyemfra (Retd), Head of the Governance Unit of the IEA, in his welcoming address said; “Since the Fourth Republic, ushered in on January 7, 1993, Ghana can be said to have succeeded in establishing functional multiparty democracy which is said to be gaining roots; and the concept that governments will continue to change through elections has gained wide acceptance.”
He said the draft transitional bill had evolved an elaborate consultative process of study, findings, recommendations, drafting, validation and redrafting for more than a year and half.
Story: Kobby Asmah & Charles Benoni Okine
The Presidential Transition Bill, 2008, which aims at further deepening and consolidating multiparty democracy in Ghana has been launched in Accra.
The bill, among other issues, seeks to establish a durable and harmonious way of transferring political authority from one constitutionally elected government to another, as well as forge national cohesion, lower the political tension and promote inter-party co-operation.
The bill, which is a product of an elaborate consultative process of study, findings, recommendations, discussions, validation and re-drafting, will also help to regulate and streamline the transition process.
The bill is a one-and-a half year collaborative effort of a multipartisan group made up of members of the Institute of Economic Affairs, in collaboration with the Ghana Political Parties Programme (GPPP), an inter consultative group comprising the four political parties with representation in Parliament — New Patriotic Party (NPP), National Democratic Congress, People’s National Convention and the Convention People’s Party (CPP).
The bill also takes a cue from the political transition in 2001, which represented a political first in the history of post-independent Ghana, where political power was transferred from one political party to a different political party.
The General Overseer of the International Central Gospel Church (ICGC), Reverend Dr Mensah Otabil, who launched the 28-page document, said; “We need a law on political transitions in this country to define the dos and don’ts for both the outgoing and incoming Presidents.”
The law, he said, was to address for instance, which public officials enter government and leave with the President; How are the handover arrangements on January 7 to be handled; and When is the new Speaker of Parliament to be elected.
Rev Otabil said the law would also bring to the fore how the country could ensure that the new President’s swearing-in ceremony was not unduly delayed, as well as how the country could ensure that Presidential preferences did not become an undue burden on the taxpayer.
He recounted the transition periods before the Fourth Republic and said those transition periods had mostly taken the form of unconstitutional interruptions in the governance arrangements of the country.
“Thankfully, under this current republic, we have had three smooth transitions; even then, two of those transitions have been from one President to himself and, therefore, have not been dogged by any difficulties,” he said.
Reverend Otabil observed that the 2001 transition from the National Democratic Congress (NDC) government to the New Patriotic Party (NPP), however, presented a real challenge, noting that “it was not the smoothest transitions”.
“Research has shown that, that transition has been partly responsible for the extreme polarisation of the Ghanaian society today,” he added.
Prof. Adzei Bekoe, Chairman of the Council of State, in a remark observed that whenever there was a run-off, the time left to declare results and the transition period was not enough to ensure a smooth exercise.
He said there were a lot of work to be done during the transitional process, which required clear ground rules and procedures and, therefore, expressed the hope that the bill would be a useful document for the consideration by the Cabinet and Parliament.
The Chairman of the NPP, Mr Peter Mac Manu, said the NPP believed in the quest to deepen democracy in the country and was gratified that through the launch of the bill, Ghana’s democracy was moving forward.
The bill, he said, would serve as a very good starting point and commended IEA for their bold effort in initiating the document.
Mr Alex Segbefia, who represented the NDC, said the bill gave credence to the fact that “we are capable of managing our own affairs”.
He described the bill as a useful guideline that the NDC could work with, saying “it is good that change is taking place so that we can move forward”.
A statement read for the Chairman of the PNC, Alhaji Ramadan, indicated that the PNC was proud to be associated with the launch of the bill and expressed the hope that the incoming Parliament would look at the issues raised and approve them to help future transitions.
Mr Ivor Kobina Greenstreet, General Secretary of the CPP, recalled that the first transition in 2001 recorded some teething problems because there were no precedent to guide them.
He said if elections were held early in November, it would help to ensure smooth transition and called for a constitutional review to amend the date of election from December 7 to November 7.
Brigadier General Francis Agyemfra (Retd), Head of the Governance Unit of the IEA, in his welcoming address said; “Since the Fourth Republic, ushered in on January 7, 1993, Ghana can be said to have succeeded in establishing functional multiparty democracy which is said to be gaining roots; and the concept that governments will continue to change through elections has gained wide acceptance.”
He said the draft transitional bill had evolved an elaborate consultative process of study, findings, recommendations, drafting, validation and redrafting for more than a year and half.
Wednesday, December 17, 2008
Fuel price reduction not politically motivated - NPA
News page 34 ,lead, (Daily Graphic), December 17/2008
Story: Charles Benoni Okine
THE National Petroleum Authority (NPA) has explained that the recent price reductions in petroleum products are not politically motivated but a true reflection of the decreasing crude oil prices on the international market.
It also noted that “these prices as announced are the result of our normal pricing calculations and nothing was artificially removed or added in arriving at these prices”.
The Chief Executive Officer of the NPA, Mr John Attafuah, gave the explanation when he addressed a news conference in Accra yesterday to react to perceptions in certain political quarters that the recent price reductions in petroleum products were done by the government to score political points.
Fuel prices were recently reduced heavily for the first time since the international market prices of crude oil hit its lowest level in more than a year.
Mr Attafuah said as per the mandate of the NPA, no individual or person was allowed to interfere in its affairs, except the sector minister, who was allowed to give policy direction.
He reiterated that the recent prices were arrived at in accordance with the laid down principles of the authority, stressing that the pertaining crude oil prices on the international market were seriously considered.
“Following the three previous reductions, it had become obvious to everybody who was following the trend in world oil prices that the NPA was likely to review prices in the middle of December so for anybody who stood to lose in the event of a price drop, the logical thing would have been to play a wait-and-see game to avoid holding excessive inventories,” he said.
He said based on intelligence reports gathered by the NPA, it was realised that delaying a new price announcement until Monday would have led to shortages on the market and would have sent the wrong signals to the public.
Mr Attafuah said it was against that background that the authority issued the new prices on Thursday, immediately after the board had met with the oil marketing companies (OMCs), for implementation the next day.
“The NPA Act, Act 691 of 2005, enjoins the authority to protect the interest of both consumers and petroleum service providers,” he reminded Ghanaians.
Mr Attafuah said while the authority expected consumers to benefit from price reductions on the world market, it was also important for the NPA to ensure that petroleum service providers did not suffer unduly.
Story: Charles Benoni Okine
THE National Petroleum Authority (NPA) has explained that the recent price reductions in petroleum products are not politically motivated but a true reflection of the decreasing crude oil prices on the international market.
It also noted that “these prices as announced are the result of our normal pricing calculations and nothing was artificially removed or added in arriving at these prices”.
The Chief Executive Officer of the NPA, Mr John Attafuah, gave the explanation when he addressed a news conference in Accra yesterday to react to perceptions in certain political quarters that the recent price reductions in petroleum products were done by the government to score political points.
Fuel prices were recently reduced heavily for the first time since the international market prices of crude oil hit its lowest level in more than a year.
Mr Attafuah said as per the mandate of the NPA, no individual or person was allowed to interfere in its affairs, except the sector minister, who was allowed to give policy direction.
He reiterated that the recent prices were arrived at in accordance with the laid down principles of the authority, stressing that the pertaining crude oil prices on the international market were seriously considered.
“Following the three previous reductions, it had become obvious to everybody who was following the trend in world oil prices that the NPA was likely to review prices in the middle of December so for anybody who stood to lose in the event of a price drop, the logical thing would have been to play a wait-and-see game to avoid holding excessive inventories,” he said.
He said based on intelligence reports gathered by the NPA, it was realised that delaying a new price announcement until Monday would have led to shortages on the market and would have sent the wrong signals to the public.
Mr Attafuah said it was against that background that the authority issued the new prices on Thursday, immediately after the board had met with the oil marketing companies (OMCs), for implementation the next day.
“The NPA Act, Act 691 of 2005, enjoins the authority to protect the interest of both consumers and petroleum service providers,” he reminded Ghanaians.
Mr Attafuah said while the authority expected consumers to benefit from price reductions on the world market, it was also important for the NPA to ensure that petroleum service providers did not suffer unduly.
Procurement Authority develops career path policy
Business page (Daily Graphic), December 17/2008
Story: Charles Benoni Okine
THE Public Procurement Authority (PPA) has developed a policy document as part of measures to institute a definite career path progression for procurement professionals within the public service.
The move is to also ensure that more public procurement officials are churned out to help monitor the procurement process.
The Chief Executive Officer of the PPA, Mr Adjenim Boateng Adjei, announced this at the close of the second international conference of the Chartered Institute of Purchasing & Supply (CIPS).
The conference, which was on the theme “Procurement Excellence Across the Sectors”, brought together more than 140 participants from Ghana, Nigeria, Zimbabwe, South Africa and the United Kingdom.
It was to encourage collaboration, discussions and effective networking of procurement professionals in its bid to expose them to contemporary cutting-edge procurement practices.
Mr Adjei who spoke on the topic, “Procurement Excellence, Ghana’s Perspective” emphasised Ghana’s commitment to build the capacities of public procurement practitioners.
He said, the Authority in 2007 trained over 7,000 practitioners and members of Entity Tender Committees.
Mr Adjei said the authority was also in the process of engaging in other medium and long term training programmes in collaboration with selected institutions to run a four-year Bachelor in Procurement Degree programmes as well as Internship programmes. qualification programmes for Purchasing & Supply graduates from the Polytechnics .
Mr Alexander Akrofi, Chairman of CIPS, Ghana Branch, noted that best practices in procurement and supply chain management could make the difference in corporate profitability as it had the potential to reduce waste and add value, reduce corruption and make resources available for development.
He described procurement as an important tool in ensuring accountability in public service, and urged practitioners to take it seriously.
The President of CIPS International, Mr Bola Afolabi, conferred the title of “Eminent Procurement and Logistics Director” of the Institute on Mr Adjenim Boateng Adjei in recognition of his wealth of expertise and the extent of commitment to the CIPS –Ghana, coupled with his unflinching passion for the procurement profession over the years.
This was followed by an awards ceremony for members who had completed their courses in Strategic Supply Chain Management, and had achieved graduate and corporate membership in the institution.
Story: Charles Benoni Okine
THE Public Procurement Authority (PPA) has developed a policy document as part of measures to institute a definite career path progression for procurement professionals within the public service.
The move is to also ensure that more public procurement officials are churned out to help monitor the procurement process.
The Chief Executive Officer of the PPA, Mr Adjenim Boateng Adjei, announced this at the close of the second international conference of the Chartered Institute of Purchasing & Supply (CIPS).
The conference, which was on the theme “Procurement Excellence Across the Sectors”, brought together more than 140 participants from Ghana, Nigeria, Zimbabwe, South Africa and the United Kingdom.
It was to encourage collaboration, discussions and effective networking of procurement professionals in its bid to expose them to contemporary cutting-edge procurement practices.
Mr Adjei who spoke on the topic, “Procurement Excellence, Ghana’s Perspective” emphasised Ghana’s commitment to build the capacities of public procurement practitioners.
He said, the Authority in 2007 trained over 7,000 practitioners and members of Entity Tender Committees.
Mr Adjei said the authority was also in the process of engaging in other medium and long term training programmes in collaboration with selected institutions to run a four-year Bachelor in Procurement Degree programmes as well as Internship programmes. qualification programmes for Purchasing & Supply graduates from the Polytechnics .
Mr Alexander Akrofi, Chairman of CIPS, Ghana Branch, noted that best practices in procurement and supply chain management could make the difference in corporate profitability as it had the potential to reduce waste and add value, reduce corruption and make resources available for development.
He described procurement as an important tool in ensuring accountability in public service, and urged practitioners to take it seriously.
The President of CIPS International, Mr Bola Afolabi, conferred the title of “Eminent Procurement and Logistics Director” of the Institute on Mr Adjenim Boateng Adjei in recognition of his wealth of expertise and the extent of commitment to the CIPS –Ghana, coupled with his unflinching passion for the procurement profession over the years.
This was followed by an awards ceremony for members who had completed their courses in Strategic Supply Chain Management, and had achieved graduate and corporate membership in the institution.
Energy pricing issues in Ghana
Energy page (Graphic Business) December 16, 2008
The petroleum sector witnessed one of its turbulent times in history since the inception of the national Petroleum Authority. The worse was the last four month where the price turbulence with regards to the international crude prices. Price of crude oil which stood at $147 per barrel as of mid July is now hovering around $50 per barrel on the average over the last month. In Ghana, the prices of petroleum products which are pegged according to what pertains on the international is also responding positively although consumers are not enjoying the full benfits. Charles Benoni Okine examines the NPA and its mandate and analyses the future of the regulator and the prices reviews.
One of the major headaches of governments in the past has been the review of petroleum products on the local market. This is because the government had a direct hand in the pricing of the products. The situation had made governments which presided over such price regimes unpopular most of the time in that, whenever the national budget and government's economic policy for the year was to be read, the populace knew that the prices of petroleum products will go up no matter how marginal. Anytime this was done, the prices of goods and services also jumped up to correspond with the increases in the prices of petroleum products.
On many occasions, the price increase were not announced to correspond with the prevailing market price of crude oil on the international market. Instead the prices are raised more as a hedge against any future rise in the price of crude oil.
It was against this background that the government decided to deregulate the petroleum downstream sector with the establishment of the National Petroleum Authority (NPA).
Brief for the NPA
The mission of the NPA is to regulate, oversee and monitor the petroleum downstream industry to ensure efficiency, growth and stakeholder satisfaction.
"Together as a team and in collaboration with our stakeholders, we shall institute appropriate measures to achieve full de- regulation of the sector. We shall ensure transparency, fairness and firmness in all our activities". It is to ensure an efficient, highly motivated, high calibre human and state - of- the- art technology that shall constitute the bedrock of its activities.
Its vision is simply to drive the Petroleum Downstream Industry to perfection.
A per its mandate, the NPA is to regulate, oversee and monitor activities in the petroleum downstream industry and where applicable do so in pursuance of the prescribed petroleum pricing formula; To achieve the object, the Authority shall; Monitor ceilings on the price of petroleum products in accordance with the prescribed petroleum pricing formula; Grant licenses to applicants under this Act; Maintain a register and keep records and data on licenses, petroleum products and petroleum marketing service providers; Provide guidelines for petroleum marketing operations; Investigate on a regular basis the operation of petroleum service providers to ensure conformity with best practice and protocols in the petroleum downstream industry as well as collect and compile data on; (i) international and domestic petroleum production, supply and demand; (ii) inventory of petroleum products, and (iii) pricing of petroleum products among others.
Consumer perception:
One of the thoughest duties of the NPA when it was established was how to review prices of the petroleum products on the market anytime the crude oil prices change on the international market. Consumers had been used to annual price reviews and the decision to make it a quarterly review initially did not work well.
However the NPA braved the storm to start the reviews on a quarterly basis and later changed it to monthly and then to the present fortnightly changes.
Although consumers have accepted the way the reviews are done they had this to tell Graphic Business on their perception;
Mr Yaw Aboaden-Atta, an upcoming investment consultant said; "it is okay the way the pricing is reviewed but I do not understand why the percentage increases are always more than the downward price reviews." he argues that if the prices are increased on the international market by a certain percentage, say 10 per cent, NPA would review by the same percentage to reflect the international crude price. However, he noted that where there is a similar percentage price drop, NPA will come down at maximum of five per cent. "If they are questioned, they will to do economics by brining in so many factors such as the prevailing interest rate, inflation among others but when it is the reverse, they hold all other things constant; That is not fair to us".
Nii Armah Aryee is a trotro driver at the Nkrumah Circle also complained about why the NPA feels reluctant on many occasions to review the prices downward even when the prices of the crude oil had dropped significantly.
Nana Ama Koomson, a trader was worried about why the NPA did not ensure that the prices, when reduced, take effect from the moment it is announced. To her the guys at the pumps hold the old prices for a while before reducing them and added "that is not fair to us and must be checked".
Petroleum Debt.
One of the reasons for the deregulation of the petroleum sector was also to ensure that the Oil Marketing Companies (OMCs) played a role in the importation of crude oil into the country either in its raw state, semi-processed or fully processed to ensue greater competition in the market. The Tema Oil Refinery (TOR) which, was the sole importer of crude oil into the country had run into serious debt that sent the banking sector almost to its knees as a result of huge borrowing from the government to finance crude oil importation. Unfortunately, the prices of the crude oil on the international market was not commensurate to the prices of petroleum products sold to consumers. At the time (2000), debts run into more than $240 million. To recover the debt, the government imposed another tax on petroleum products known as the Debt Recovery Levy to enable consumers 'cough' out what they enjoyed.
A similar situation hit the country in the wake of the unprecedented rise in crude oil prices on the international market when prices skyrocketed to $147 per in July, one of the highest in history.
As the prices rose, the NPA continued to raise the prices to avoid incurring any debts until the President had to intervene with a package that covered the petroleum sector. The NPA had no option than to halt the increase in prices of petroleum products at $118 per barrel and in the end incurred a debt of about $168 million. Today, although the prices of crude oil had reduced by more than 100 per cent since it reached its highest point in years, consumers are not enjoying it to the maximum because according to the NPA, there had been an agreement with the major importers including TOR to recover the amount over a period.
NPA Explains
The NPA told the media that the last downward review of petroleum prices is not the actual reflection of the drop in the price of crude oil on the international market.
It explained that the move was purely intended to ensure a recovery from the huge losses that had been incurred over the period when adjustments in the prices were frozen in May when the prices reached.
The Chief Executive of the NPA, Mr John Attafuah, noted that “the average decrease by our calculations was about 17 per cent but the authority, in consultations with the wholesalers, allowed only an average of 10 per cent reduction in the ex-pump prices to allow for the recovery of some of their losses”.
Analysts and members of the public had challenged the authority to come clean on the review as announced since November 1, 2008 because the percentage reduction in the prices was not a true reflection of what had transpired with respect to the downward prices on the international market.
The NPA boss said as per the arrangement between the NPA and the wholesalers, the recovery per month would be $12 million until the losses incurred had been fully recovered.
It had been the complain from consumers that the prices quoted by the NPA were not down enough considering the drop in the prices of crude oil on the international market.
But the NPA explains that two very important factors used in the determination of petroleum product prices on the local market are world prices of crude oil and products and the exchange rate between the cedi and the US dollar. While the prices of crude oil and petroleum products were on the decline on the world market, the dollar, on the other hand, strengthened against the cedi, thereby making the local prices of petroleum products still high, compared to those set on May 3, 2008.
It was clear that although the price for premium in US dollar per litre was below the May 3, 2008 level from September 1, 2008, the price premium in Ghana cedi per litre was higher than the May 3, 2008 figure”.
It was not until October 16, 2008 that the price of premium, 70.850Gp per litre, started going below the May 3 levels of 76.3682Gp per litre.
The NPA was of the strong view that the impact of the exchange rate on prices is the same for all the petroleum products.
Conclusion:
In many parts of the world, the effect of the soaring crude oil prices and food crisis forced many on the street protests in ‘mighty’ United States of America (USA) and other parts such France.
But in Ghana, this did not happen and although the economy suffered, its resilience made it able to withstand the shocks although the situation forced the crude oil import bill from about $760 million per annum to almost $2 billion.
Undoubtedly, the present scenario on the international market has made all to breath a deep sigh of relief and Ghanaian consumers are no exception. It is only expected that the NPA will continue to live up to expectation by reducing the prices further downwards to reflect what pertains on the international market as far as crude oil is concerned.
Another issue is about the autonomy of the regulatory body as this was brought to a test in the heat of the crisis. Although the NPA denied any government interference as far as the halt in the review of the prices was concerned, it was obvious from the interventions as announced by the President.
What analysts are asking is that, at what point will consumers to told about the payment of the debt and how it will impact on the percentage reduction should the world price for the commodity continue to drop.
In spite of all the diffuclties, analysyts believe that the establishement of the NPA has taken off the burden of the government in announcing petroleum prices even in difficult times. Today, prices change and yet consumers seldom concerned because they have come to accept that unless they are made to pay realistic prices of petroleum products, the economy can be affected in a negative way particularly when the crude oil prices soar as happened mid year.
The petroleum sector witnessed one of its turbulent times in history since the inception of the national Petroleum Authority. The worse was the last four month where the price turbulence with regards to the international crude prices. Price of crude oil which stood at $147 per barrel as of mid July is now hovering around $50 per barrel on the average over the last month. In Ghana, the prices of petroleum products which are pegged according to what pertains on the international is also responding positively although consumers are not enjoying the full benfits. Charles Benoni Okine examines the NPA and its mandate and analyses the future of the regulator and the prices reviews.
One of the major headaches of governments in the past has been the review of petroleum products on the local market. This is because the government had a direct hand in the pricing of the products. The situation had made governments which presided over such price regimes unpopular most of the time in that, whenever the national budget and government's economic policy for the year was to be read, the populace knew that the prices of petroleum products will go up no matter how marginal. Anytime this was done, the prices of goods and services also jumped up to correspond with the increases in the prices of petroleum products.
On many occasions, the price increase were not announced to correspond with the prevailing market price of crude oil on the international market. Instead the prices are raised more as a hedge against any future rise in the price of crude oil.
It was against this background that the government decided to deregulate the petroleum downstream sector with the establishment of the National Petroleum Authority (NPA).
Brief for the NPA
The mission of the NPA is to regulate, oversee and monitor the petroleum downstream industry to ensure efficiency, growth and stakeholder satisfaction.
"Together as a team and in collaboration with our stakeholders, we shall institute appropriate measures to achieve full de- regulation of the sector. We shall ensure transparency, fairness and firmness in all our activities". It is to ensure an efficient, highly motivated, high calibre human and state - of- the- art technology that shall constitute the bedrock of its activities.
Its vision is simply to drive the Petroleum Downstream Industry to perfection.
A per its mandate, the NPA is to regulate, oversee and monitor activities in the petroleum downstream industry and where applicable do so in pursuance of the prescribed petroleum pricing formula; To achieve the object, the Authority shall; Monitor ceilings on the price of petroleum products in accordance with the prescribed petroleum pricing formula; Grant licenses to applicants under this Act; Maintain a register and keep records and data on licenses, petroleum products and petroleum marketing service providers; Provide guidelines for petroleum marketing operations; Investigate on a regular basis the operation of petroleum service providers to ensure conformity with best practice and protocols in the petroleum downstream industry as well as collect and compile data on; (i) international and domestic petroleum production, supply and demand; (ii) inventory of petroleum products, and (iii) pricing of petroleum products among others.
Consumer perception:
One of the thoughest duties of the NPA when it was established was how to review prices of the petroleum products on the market anytime the crude oil prices change on the international market. Consumers had been used to annual price reviews and the decision to make it a quarterly review initially did not work well.
However the NPA braved the storm to start the reviews on a quarterly basis and later changed it to monthly and then to the present fortnightly changes.
Although consumers have accepted the way the reviews are done they had this to tell Graphic Business on their perception;
Mr Yaw Aboaden-Atta, an upcoming investment consultant said; "it is okay the way the pricing is reviewed but I do not understand why the percentage increases are always more than the downward price reviews." he argues that if the prices are increased on the international market by a certain percentage, say 10 per cent, NPA would review by the same percentage to reflect the international crude price. However, he noted that where there is a similar percentage price drop, NPA will come down at maximum of five per cent. "If they are questioned, they will to do economics by brining in so many factors such as the prevailing interest rate, inflation among others but when it is the reverse, they hold all other things constant; That is not fair to us".
Nii Armah Aryee is a trotro driver at the Nkrumah Circle also complained about why the NPA feels reluctant on many occasions to review the prices downward even when the prices of the crude oil had dropped significantly.
Nana Ama Koomson, a trader was worried about why the NPA did not ensure that the prices, when reduced, take effect from the moment it is announced. To her the guys at the pumps hold the old prices for a while before reducing them and added "that is not fair to us and must be checked".
Petroleum Debt.
One of the reasons for the deregulation of the petroleum sector was also to ensure that the Oil Marketing Companies (OMCs) played a role in the importation of crude oil into the country either in its raw state, semi-processed or fully processed to ensue greater competition in the market. The Tema Oil Refinery (TOR) which, was the sole importer of crude oil into the country had run into serious debt that sent the banking sector almost to its knees as a result of huge borrowing from the government to finance crude oil importation. Unfortunately, the prices of the crude oil on the international market was not commensurate to the prices of petroleum products sold to consumers. At the time (2000), debts run into more than $240 million. To recover the debt, the government imposed another tax on petroleum products known as the Debt Recovery Levy to enable consumers 'cough' out what they enjoyed.
A similar situation hit the country in the wake of the unprecedented rise in crude oil prices on the international market when prices skyrocketed to $147 per in July, one of the highest in history.
As the prices rose, the NPA continued to raise the prices to avoid incurring any debts until the President had to intervene with a package that covered the petroleum sector. The NPA had no option than to halt the increase in prices of petroleum products at $118 per barrel and in the end incurred a debt of about $168 million. Today, although the prices of crude oil had reduced by more than 100 per cent since it reached its highest point in years, consumers are not enjoying it to the maximum because according to the NPA, there had been an agreement with the major importers including TOR to recover the amount over a period.
NPA Explains
The NPA told the media that the last downward review of petroleum prices is not the actual reflection of the drop in the price of crude oil on the international market.
It explained that the move was purely intended to ensure a recovery from the huge losses that had been incurred over the period when adjustments in the prices were frozen in May when the prices reached.
The Chief Executive of the NPA, Mr John Attafuah, noted that “the average decrease by our calculations was about 17 per cent but the authority, in consultations with the wholesalers, allowed only an average of 10 per cent reduction in the ex-pump prices to allow for the recovery of some of their losses”.
Analysts and members of the public had challenged the authority to come clean on the review as announced since November 1, 2008 because the percentage reduction in the prices was not a true reflection of what had transpired with respect to the downward prices on the international market.
The NPA boss said as per the arrangement between the NPA and the wholesalers, the recovery per month would be $12 million until the losses incurred had been fully recovered.
It had been the complain from consumers that the prices quoted by the NPA were not down enough considering the drop in the prices of crude oil on the international market.
But the NPA explains that two very important factors used in the determination of petroleum product prices on the local market are world prices of crude oil and products and the exchange rate between the cedi and the US dollar. While the prices of crude oil and petroleum products were on the decline on the world market, the dollar, on the other hand, strengthened against the cedi, thereby making the local prices of petroleum products still high, compared to those set on May 3, 2008.
It was clear that although the price for premium in US dollar per litre was below the May 3, 2008 level from September 1, 2008, the price premium in Ghana cedi per litre was higher than the May 3, 2008 figure”.
It was not until October 16, 2008 that the price of premium, 70.850Gp per litre, started going below the May 3 levels of 76.3682Gp per litre.
The NPA was of the strong view that the impact of the exchange rate on prices is the same for all the petroleum products.
Conclusion:
In many parts of the world, the effect of the soaring crude oil prices and food crisis forced many on the street protests in ‘mighty’ United States of America (USA) and other parts such France.
But in Ghana, this did not happen and although the economy suffered, its resilience made it able to withstand the shocks although the situation forced the crude oil import bill from about $760 million per annum to almost $2 billion.
Undoubtedly, the present scenario on the international market has made all to breath a deep sigh of relief and Ghanaian consumers are no exception. It is only expected that the NPA will continue to live up to expectation by reducing the prices further downwards to reflect what pertains on the international market as far as crude oil is concerned.
Another issue is about the autonomy of the regulatory body as this was brought to a test in the heat of the crisis. Although the NPA denied any government interference as far as the halt in the review of the prices was concerned, it was obvious from the interventions as announced by the President.
What analysts are asking is that, at what point will consumers to told about the payment of the debt and how it will impact on the percentage reduction should the world price for the commodity continue to drop.
In spite of all the diffuclties, analysyts believe that the establishement of the NPA has taken off the burden of the government in announcing petroleum prices even in difficult times. Today, prices change and yet consumers seldom concerned because they have come to accept that unless they are made to pay realistic prices of petroleum products, the economy can be affected in a negative way particularly when the crude oil prices soar as happened mid year.
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