What will happen to price of fuel if government decides to listen to 16 driver unions?

Fuel prices will go down by some 25.44% if government decides to listen to the 16 driver unions who are collectively calling for the scrapping of five taxes on the price build-up of fuel.

The coalition of commercial transport owners made up of 16 transport unions – including the biggest group, the Ghana Private Road Transport Union (GPRTU) have vowed to continue their nationwide strike if government fails to address their grievances.

The transport strike which took place on Monday, 6^th December, 2021 left many commuters stranded, resulting in some economic loses.  The leadership of GPRTU later in the day called off the strike indicating in a statement that the Presidency had invited them for a deliberation to be held on the issue.

According to the 16 unions, they have identified at least five taxes on the price build-up of fuel that they believe serve no useful purpose. The group wants the removal of: Energy Sector Recovery Levy of GHp20 per litre, Sanitation and Pollution Levy of GHp10 per litre, Energy Debt Recovery Levy of GHp49 per litre, Road Fund Levy of GHp48 per litre and; Special Petroleum Levy of GHp46 per litre.

Adding these five taxes will amount to a total of GH¢1.73. JoyNews checks reveals that the current average price of fuel hovers around GH¢6.80. This means that if government agrees to scrap these five taxes, fuel price at the pump will see a dip from the current GH¢6.80 to GH¢5.07 resulting in a 25.44% decrease.

Further analysis of data put out by the National Petroleum Authority shows that the tax components in the price build-up of ex-pump price of fuel have increase by 47.2%; from a total of GH¢1.97 in 2018 (1^st December Window) to GH¢2.9 in 2021 (1^st December Window).

This simply means that the amount you pay as tax when you buy a litre of petrol or diesel at the pumps have increased from GH¢1.97 in 2018 to GH¢2.9 in 2021.

In 2021, fuel prices have gone up by almost 40%; from GH¢4.86 in January to GH¢6.8 as of December 7, 2021. 


SOURCE: Nii Otu Dadeban Ankrah