Former Finance Minister and Ranking Member on Parliament’s Finance Committee Dr Mohammed Amin Adam has challenged the governing National Democratic Congress (NDC) to accept the same description it used against the former New Patriotic Party (NPP) government over rising fuel prices, arguing that the economic circumstances being cited to explain current increases also existed under the previous administration.
In a Facebook post on Sunday, September 27, Dr Amin Adam said the NDC, while in opposition, repeatedly described rising fuel prices under the then Akufo-Addo/Bawumia administration as evidence of “insensitive and bad leadership”.
He said the party blamed taxes, cedi depreciation and economic management for the increases and demanded that the government stabilise the currency to bring down fuel prices.
Dr Amin Adam, however, noted that the 2021 increases occurred amid a major global energy shock, with Brent crude rising from about US$50 per barrel at the beginning of the year to approximately US$86 by late October.
He also cited US Energy Information Administration data showing that global petroleum inventories fell by 469 million barrels in 2021, while the IMF reported that Brent had risen above US$85 amid tight energy supplies and a global surge in energy prices.
“The fuel pump has a long memory,” Dr Amin Adam wrote, arguing that the economic principles governing fuel prices have not changed simply because there has been a change in government.
“The economics has always been straightforward: International product price × Exchange rate + Taxes/Levies + Margins = Domestic Pump Price,” he stated, stressing that Ghana remains largely a price-taker in the international petroleum market and that movements in global prices and the exchange rate affect domestic pump prices.
He therefore argued that the standard applied by the NDC to the former NPP government over rising fuel prices should also be applied to the NDC government now in office.
“If the NPP was insensitive and provided bad leadership because fuel prices were rising, then the NDC should accept the same description now, rather than trying so hard to explain it away,” he said.
According to Dr Amin Adam, the international petroleum prices, geopolitical pressures and exchange-rate dynamics being cited by the NDC today were also factors in 2021.
“The fuel pump has not changed the economics. It has simply changed who has to explain it,” he added.