Former Sekondi MP Andrew Egyapa Mercer has cautioned against politicising fuel prices, emphasising that fluctuations at the pump are primarily driven by global oil markets rather than just domestic policies. Speaking on Good Morning Ghana on Metro TV on April 15, he stated that recent reductions in fuel prices have been wrongly credited to local economic management, arguing instead that declining global crude prices were the key factor.
“Questions are being raised about Ghana’s fuel pricing and energy policies,” he remarked. “However, we need to be careful about how we engage in politics concerning petroleum prices. These are global commodities, and their pricing is largely beyond our control.” Mercer shared these insights during an interview with Moro Awudu on the Good Morning Ghana show.
His comments come amid debate over a one-cedi fuel levy introduced by the government to support payments in the energy sector. Mr Mercer pointed to an emergency cabinet meeting involving the finance and energy ministries as evidence of how international developments continue to shape Ghana’s economy.
“One is tempted to ask how a problem 7,000 kilometres away becomes a major issue for Ghana,” he said. “But the reality is that we operate within a global system. When supply chains are disrupted anywhere, it affects us.” He said Ghana’s reliance on imported petroleum products leaves policymakers with limited room to manoeuvre.
“Your choices are very limited. If supply is disrupted, the impact will be felt at the pumps,” he added. On the controversial levy, he said the government had justified it as necessary to settle obligations to power producers, but stressed that deeper structural issues persist. “We were told the government needed to impose the levy to pay for fuel and energy costs,” he said. “But the deeper issue is the structure of power purchase agreements.”
He added that even if the Electricity Company of Ghana collected all revenues, it would still fall short. “ECG is the only entity that collects money across the value chain, yet it cannot cover all invoices. Government has always had to supplement,” he said. Mr Mercer also challenged claims that recent fuel price drops were the result of strong economic management or a stronger cedi.
“We were told it was because of strong management and the appreciation of the cedi,” he said. “But the truth is crude oil prices dropped significantly on the world market.” He explained that global crude prices account for the bulk of pump prices. “About 70 percent of pump prices are driven by global crude prices, while the exchange rate contributes around 30 percent,” he said. “So when crude drops from around 90 dollars to 60 dollars per barrel, that has a major effect.”
According to him, recent price increases reflect shifting global conditions rather than policy failure. “The same economic managers are still in place,” he said. “What has changed is the global environment.” He also questioned calls by civil society groups for a reduction of about 1.65 cedis per litre, suggesting more engagement with the government was needed.
“They issued a statement, but I would have expected a more formal engagement with the ministers,” he said. “These are key stakeholders, and dialogue is important.” Mr Mercer stressed that Ghana’s status as an oil-producing country does not insulate it from global pricing. “Even if we refine all our crude locally, it will still be priced at international market rates,” he said. “No one will sell it to us at a discount simply because we produce it.”
Reflecting on past debates, he cited the Russia-Ukraine war, which pushed oil prices above 130 dollars per barrel and drove up global shipping costs. “Container shipping costs tripled, inflation rose, and yet it was turned into a political argument,” he said. “We made it seem as though the government was using global events as an excuse.” He ended with a warning about public discourse on the economy. “If we do not present these issues honestly, we risk misleading the public about how the economy actually works,” he said.
Source: Edward Acquah
