Gov’t asked to account for TOR levy

The Private Enterprise Foundation (PEF) has observed with worry the apparent lack of transparency regarding the Tema Oil Refinery (TOR) debt-recovery levy, which is 8Gp/litre on petroleum products.

The levy, according to the Foundation, has been collected for the past 10 years but the public is neither aware of the amount of the debt that has been repaid, the amount outstanding nor how long it will take to completely retire the debt.

“The government must publish the initial quantum of the TOR debt, how much has been paid, what is the outstanding balance, the interest rate on the debt, and the amortisation schedule to ascertain whether we are accumulating enough or in excess to pay-off what is outstanding,” said a statement signed by both Asare Akuffo and Nana Osei-Bonsu, President and Director-General respectively of the Foundation in Accra. 

This proposal was made by the Foundation’s Governing Council at an emergency meeting it held with the National Petroleum Authority (NPA) to understand and clarify the petroleum-pricing formula. 

In its statement, which follows the recent increase in prices of petroleum products, the Council recommend that since every consignment of petroleum products delivered to the country is procured under secured purchase contracts, the actual contract purchase prices should be used in computing the ex-refinery price of petroleum products -- instead of the current practice of using the two-week average pricing of benchmark oil in the international market.

It also proposed that the financing cost paid to bulk distribution companies for holding strategic supplies be based on a defined formula rather than negotiations, as is currently being done.

Business groups have raised concerns about the recent jump in fuel prices, which is impacting seriously on enterprises, particularly small and micro businesses.

The price increases -- 20 percent for petrol and diesel and 50 percent for Liquefied Petroleum Gas (LPG) -- are likely to heighten the agitation for increases in salaries of workers, which will in turn increase the cost of production and the provision of services, employers have said.

The Association of Ghana Industries (AGI) last week raised a similar concern regarding the timing of the recent fuel-price increment.

The AGI is of the view that fuel-price reviews must be made amenable to an automatic adjustment system that allows periodic price reviews for effective planning.

For the first half of 2012, the cedi depreciated by about 20 percent while crude oil price on the world market averaged an increase of about 8 percent. But fuel prices were not reviewed accordingly. 

“We note the challenges associated with implementing the automatic adjustment system when such unexpected changes occur in the determinants of fuel price reviews. We urge Government to develop a system to manage such challenges,” the AGI said. 

It added: “Government ought to make provisions in the national budget for fuel subsidies for effective planning, and should submit a supplementary budget to cover any unplanned additional subsidies on account of significant changes in the price determinants.”