Dr Riverson Oppong, Chief Executive Officer of the Chamber of Oil Marketing Companies (COMAC), has warned that maintaining fuel subsidies without a reliable funding source could place additional pressure on Ghana’s finances in the future.
His warning follows the government’s introduction of a GH¢2-per-litre subsidy on diesel aimed at easing the impact of rising fuel prices on consumers, with growing calls for the measure to be extended to petrol.
Dr Oppong said although fuel subsidies can offer consumers immediate relief, they could eventually become a financial burden on the public if the interventions are not supported by sustainable funding.
“For me, for a developing country like Ghana, giving buffers is very dangerous. Giving buffers is very dangerous because at the end of the day, you and I are going to pay for this one way or the other”.
Dr Oppong pointed to Ghana’s electricity sector as an example, arguing that efforts to keep tariffs low eventually created financial obligations that had to be covered through other means.
“It happened with the electricity market; years go by and what happened? We saw that we were paying for unrealistic electricity prices,” he said.
He cautioned that while such interventions may offer short-term relief, consumers could eventually bear the cost through other charges to make up for the financial gap created.
Dr Oppong said his concern was less about the introduction of fuel subsidies and more about the sustainability of their financing and the potential impact on businesses within the downstream petroleum sector.
“ I’m not against it. Don’t get me wrong because I’m also a consumer. But where is it coming from?. If it’s going to hit the operational account of the industry, then I have a problem”, he said.
He suggested that the government consider alternative revenue sources to fund such interventions, instead of allowing the financial cost to build up and eventually fall on consumers and businesses.
Dr Oppong therefore urged the government to ensure that any fuel subsidy is backed by a clear and sustainable financing mechanism, warning that without proper planning, the relief offered today could translate into higher financial costs for consumers and businesses in the future.
