Remove PSRL, Energy Sector Levy to Cushion Ghanaians – Mercer
Fuel Prices: Remove PSRL, Energy Sector Levy to Cushion Ghanaians – Egyapa Mercer
With fuel prices climbing, former Energy Minister and Sekondi MP Egyapa Mercer thinks government has an obvious lever it isn’t pulling scrapping some of the taxes and levies loaded onto petroleum products.
Mercer’s focus is specifically on levies that feed into the Consolidated Fund, naming the Price Stabilisation and Recovery Levy (PSRL) and the Energy Sector Levy as the two that should go.
Speaking on TV3’s Daily Brief on Wednesday, September 16, he pointed out that this was the very position the NDC itself pushed while in opposition. 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.
Mercer’s central case rests on windfall revenue. According to him, government is currently pulling in somewhere between GH¢6 billion and GH¢8 billion from windfall gains that were never budgeted for in the first place.
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, he said.
He acknowledged that government has incurred costs of roughly GH¢12 billion so far. But even after factoring in those costs alongside the diesel relief measures, he argues there’s still meaningful room left over.
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 explained.
For Mercer, dropping these levies isn’t just about giving consumers a break at the pump though that’s the immediate payoff. He also believes it would help prevent financial obligations from piling up within the downstream petroleum sector, addressing a longer-term problem while easing short-term pressure on households.
