Fuel Prices To Drop This Week – Gov’t Hints

The Akufo-Addo administration is continuing  efforts to further reduce the hardships of Ghanaians inherited upon assumption of power with  expected announcement  of further reduction in fuel prices this week.  

A deputy minister of Information Pius Enam Hadzide at a  press briefing Sunday said “government expects a further drop in fuel prices by an average 5.8% reduction for petrol, 4.8% reduction for Diesel and 2.46% reduction for LPG. This is occasioned by the marginal strength of the cedi and prices around the world.  The Deputy Minister said the administration is optimistic that the drop in inflation and fuel will therefore add another layer to the work being done in these first 24 months to ease the legacy burden on Ghanaians.He also stressed that a further drop inflation to 9.3% will put more money in the pockets of people.

Inflation has seen a continued fall since January 2017. It has dropped from 15.4% in Dec 2016 and is now at a 6 year low of 9.3%.

What this means is that if in Dec 2016 the prices of goods and services was increasing at 15.4 % (Annual Progress Report, 2016), now through the policies of the administration, the rate of price increases has slowed down to 9.3% enabling Ghanaians to retain more money in their pockets and reduce their hardship.

Specifically, measures such as fiscal consolidation, monetary policy tightening, relative exchange rate stability for most part of 2017 as well as easing inflationary pressures were implemented to deal with the higher rate of inflation the government inherited. These measures yielded results by reducing the headline inflation from 15.4% in December, 2016 to 11.8% in December, 2017. ( Mid-Year Budget Review, 2018) Thus, 3.6% reduction.

These prudent measures were again steadily implemented in 2018 fiscal year and this accelerated the disinflationary trend experienced in 2017.  From headline inflation of 11.8% in December, 2017 the trend was further dragged down within the first five months of 2018 to 9.8% (May, 2018). Owing to the competence of the economic managers, in October 2018, inflation rate further declined to 9.5%.

Although there were slight increases in the ensuing months after May, the managers were able to direct it back on track.

The most recent decline is the further reduction in November, 2018, from a rate of 9.5% in October 2018 to 9.3% in November the same year. This is the lowest rate of inflation recorded since 2013.The general price level has therefore comparatively seen more stability in the last 2 years. In other words, the rate at which the purchasing power of consumers is reduced due to inflation is has been kept under control.

These reductions come on the back of various other interventions that have been designed to bring relief to the good people of Ghana including;

• Reduction in some 14 tax handles in 2017
• Reduction in electricity tariffs
• Reduction in taxes on petroleum products from 40 to 26%
• Taking up of senior high school fees by government