The Ghana National Petroleum Authority (NPA) has announced the removal of fuel subsidy and energy subsidies in the country as part of its implemented regulatory measures to ensure stability across its downstream sector.
The decision was communicated by the Chief Executive Officer of NPA, Abdul Hamid, during a presentation at the ongoing Africa Refiners and Distributers week 2023, in Cape Town, South Africa.
According to Hamid, the Ghanaian government, through the NPA, has taken steps to remove subsidies and deregulate its markets. He explained that industries were shutting down because the government found it hard to provide subsidies and that today the industry is being powered by investments in the private sector.
Hamid emphasized that these steps were taken to ensure affordability and security for vulnerable consumers.
The removal of subsidies is one of several reforms implemented by the NPA in response to the global oil and gas market volatility caused by the Russian-Ukraine war and energy transition-related policies.
Hamid revealed that the NPA has installed fuel caps for the first time in 30 years as a measure to intervene and control market instability.
He further stated that the NPA has created a special fund to assist refineries in boosting their capacity to 50 barrels of oil in order to meet the country’s growing demand. Hamid stated that these measures are part of a broader strategy to improve the downstream sector and ensure its stability.
The removal of fuel subsidy and energy subsidies will have a significant impact on Ghana’s economy as it will help reduce the government’s financial burden and increase investment in the private sector, Investors King explains.
However, it may also result in higher prices for consumers, especially vulnerable groups. To mitigate the impact of these measures on the poor, the government and the NPA must ensure that prices remain affordable and implement policies to support vulnerable groups.