Economist Professor Peprah has cautioned against aggressive calls for steep reductions in fuel prices, warning that while moderate adjustments may be sustainable, drastic cuts could destabilise the petroleum pricing structure and the wider economy.
His remarks come amid growing pressure from civil society organisations (CSOs), which are demanding a reduction of about GH¢1.65 in fuel prices, arguing that recent global oil trends, exchange rate movements, and domestic pricing margins should translate into cheaper pump prices for consumers.
According to the CSOs, the current fuel pricing regime has placed an excessive burden on transport operators, businesses, and households, with knock-on effects on food prices and the overall cost of living. They insist that petroleum margins and taxes should be reviewed downward to reflect what they describe as “relief space” in the downstream sector.
However, Prof. Peprah has urged caution, stressing that fuel pricing in Ghana is influenced by several interconnected factors, including global crude oil prices, the cedi’s performance against the US dollar, import duties, distribution margins, and statutory levies.
He explained that while a moderate adjustment of around 20 percent in certain components of the pricing structure could be absorbed without major disruptions, a 40 percent reduction—as suggested by some stakeholders—could be “dangerous” for the stability of the downstream petroleum sector.
He warned that such a sharp cut could create fiscal gaps, disrupt supply chain sustainability, and discourage investment in the petroleum industry. “The pricing system is not driven by one factor alone. If you force excessive reductions without considering the full structure, you risk creating shortages and instability,” he cautioned.
Prof. Peprah further noted that government revenue from petroleum levies plays a critical role in infrastructure development and energy sector financing, adding that abrupt changes could undermine budgetary planning.
Meanwhile, CSOs continue to insist that government must prioritise relief for consumers, arguing that the current economic pressures justify a significant downward review in pump prices. They are calling for urgent stakeholder engagement involving government, industry players, and consumer groups to reassess the pricing formula.
The debate adds to ongoing national conversations about fuel affordability, inflation control, and the balance between market sustainability and consumer welfare.
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