Ghana cuts fuel subsidies following increase in crude oil prices

Ghana has cut fuel subsidies following an increase in crude oil prices and the depreciation of the Ghana cedi currency, the head of Ghana’s National Petroleum Authority (NPA) said in a statement yesterday.

Ghana, which joined the club of oil producers in West Africa last year, has come under increased pressure from the International Monetary Fund (IMF)  to remove the fuel subsidies.

The IMF has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but do promote corruption and smuggling.

The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.

Alex Mould the Chief Executive Officer of the NPA, said the cumulative effect of the rise in crude oil prices this year and the about 5.7 per cent depreciation of the cedi meant a 25 per cent increase in cedi terms in the cost of procuring crude oil and petroleum products since January.

Mould said Ghana has spent about 450 million cedis ($276 million) on fuel subsidies in 2011.

The price change effective from December 29, will see the cost of Liquefied Petroleum Gas (LPG) increase by 30 per cent while petrol and diesel will go up 15 per cent at pump.