Former Energy Minister and Member of Parliament for Sekondi, Egyapa Mercer, has called on the government to scrap some taxes and levies on petroleum products to ease the pressure of rising fuel prices on consumers.
Mercer said the government should remove levies that feed into the Consolidated Fund, particularly the Price Stabilisation and Recovery Levy (PSRL) and the Energy Sector Levy, as part of measures to cushion Ghanaians from the impact of rising crude oil prices.
Speaking on TV3’s Daily Brief on Wednesday, September 16, he argued that the government’s additional revenue from windfall gains provides room to reduce the tax burden on petroleum products without putting undue pressure on public finances.
“What we believe government should be doing and the NDC said when they were in opposition is to prescribe a removal of the taxes and levies that go to the Consolidated Fund as a means to provide cushion to Ghanaians and also not incur debt in the Energy Sector downstream space,” he said.
“For example, they have to take away the Price Stabilisation Recovery Levy (PSRL) and also the Energy Sector Levy,” he added.
Mercer further claimed that the government was currently generating between GH¢6 billion and GH¢8 billion in windfall revenue that was not originally captured in the budget.
He said this additional revenue could be used to offset some of the financial pressure created by higher crude oil prices and provide relief to consumers.
According to him, the government has so far incurred about GH¢12 billion, but after accounting for the additional windfall revenue and the cost of measures to reduce diesel margins, there could still be about GH¢4 billion available as excess revenue.
“If you look at what government is generating from windfall now, they are generating in excess of GH¢6-GH¢8 billion which was not budgeted for,” Mercer said.
“Meanwhile, what they have incurred so far is about GH¢12 billion. So even if you do a net of what government has generated through the windfall and the crude price and what it is incurring by way of the so-called reduction in the margins, you will be getting some GH¢4 billion that government can still take into the Consolidated Fund as excess revenue that it didn’t budget for,” he added.
Mercer maintained that removing selected taxes and levies would offer immediate relief to consumers while reducing the risk of accumulating financial obligations in the downstream petroleum sector.
