The National Petroleum Authority (NPA) has directed Oil Marketing Companies OMCs to re-introduce Stabilization and Recovery Levy on products.
Documents cited by JoyBusiness shows that petrol would attract ¢0.12 as levy and ¢0.10 on Diesel.
This directive is coming after the levy was waved earlier this year when prices were expected to go up on the local market because of challenges with the depreciation of the cedi and increase prices of petroleum products.
The directive is coming from the Energy and Finance ministries through the NPA and it was based on the established principle which seeks to insulate consumers against rising prices of petroleum products.
NPA on the Levy
Some industry players have questioned the rationale behind keeping this tax on products at a time when there have been concerns that there are too much taxes on petroleum products.
But sources say the levy is critical because, without them, there wouldn’t be funds to pay for the subsidies on premix fuel and residual fuel oil, which are used by persons with the local income earners.
The source argues that, it has strategically applied this levy to ensure that it does not negatively affect consumers, by applying it when prices low and take it off when prices at the pumps are going up.
The Levy and oil marketing companies
We however understand that the directive is impacted on the various price review carried out by the various oil marketing companies.
Prices at the pumps should have gone by more than 5 to 8% for all the various products, from Thursday based on calculations by Business Analysts. This would have made it one of the biggest reductions in recent times.
However, based on the adjustments done by the major players, like GOIL, Shell and Total, Prices are going down by just about a percentage. This should mean that a litre of diesel and petrol are now going for ¢5.19 translating into ¢23.33 per gallon.
Some of the OMCs have told journalists that had it not been for the Levy, they could have gone down by more than 1%.