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Press Statement
Development Data
December 14, 2011
GOVERNMENT AND NPA MUST OBEY
COURT ORDER
We have taken note of Government’s statement
on the abolishing of illegal fuel price
margins by the High Court. The statement is
most unfortunate. In particular, the argument
by Government that the removal of the illegal
price top-ups will lead to higher fuel prices
is deceitful.
For the benefit of the public, we quote the
petroleum pricing formula made pursuant to the
National Petroleum Authority Act, 2005 (Act
691):
i. CIF = Cost (FOB) + Insurance + Freight
ii. Related Charges = Off-loading cost +
In-transit losses +
Inspection + L/C cost + Financial costs +
Storage cost + In-plant losses +
Rack loading cost + Operating margin
iii. Ex-refinery Price = CIF + Related Charges
iv. Ex-pump Price = Ex-refinery Price + Govt
taxes and levies
+ Distribution margins
The ex-pump price is the price at which the
public buy fuel at the filling station. It is
important to point out that this formula was
stated in court by plaintiffs and accepted
by both Tema Oil Refinery and National
Petroleum Authority.
Per this formula, at current crude oil price
of (US$107.71 per barrel) and exchange rate of
GH¢1.61 per US dollar, a gallon of diesel for
example should be sold at GH¢5.96 at the
filling station. Consumers are buying a gallon
of diesel at GH¢6.91 because the NPA has
inserted an “ex-refinery differential” of 95
GHp per gallon.
It is this illegal price top-up that has been
abolished by the High Court. The refusal by
government and the NPA to comply with the
court’s ruling on grounds that it will lead to
high fuel prices is mischievous and
disgraceful. It is a set back to the rule of
law.
There is currently no subsidy on the sale of
fuel in Ghana. And the threat by government to
remove subsidies from fuel prices in the face
of the court ruling is laughable. We challenge
government to publish the full details of
current fuel price computations. We further
challenge government to publish the statement
of account on the ex-refinery differential
accounts.
The NPA and government should stop hiding
behind the option of a court appeal to
perpetuate what is clearly an illegal
extortion abolished by a court of the land.
We respectfully call on civil society,
especially the institutions with
representation on the NPA governing board,
namely, the Petroleum Workers Union, the
Chamber of Commerce, and the Chamber of Mines
to take keen interest in the workings of the
NPA to ensure that the rule of law and the
public interest are protected.
Joshua Quashigah-Sowu
Research Director
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