GOIL: Fuel Price Increase Alone Cannot Justify 30% Transport Fare Hike
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The Ghana Oil Company Limited (GOIL) says a rise in fuel prices alone cannot justify the proposed 30% increase in transport fares by the Ghana Private Road Transport Union (GPRTU).
Chief Executive Officer of GOIL, Edward Bawa, said several other factors, including the cedi-dollar exchange rate, spare parts and insurance costs, must be considered before any adjustment is made to transport fares.
His comments come amid growing concerns over a possible increase in pump prices as global crude oil prices approach $100 per barrel, a development that could further increase the cost of transportation.
Mr Bawa said GOIL is currently assessing the situation and exploring measures to cushion consumers from the impact of possible price increases.
“We will get there. We’re still looking, or we’re still studying the various scenarios, still looking at what we should do, but what I can assure Ghanaians is that we will always want to be on their side,” he said.
He explained that although GOIL must ensure that its operational costs are covered, the company would also take into account the effect of any price adjustments on consumers.
“Prices going up does not necessarily mean that at the pumps it will go up. It again depends on what strategy you are using. So GOIL will definitely find a way of trying to tame the market,” he said.
Mr Bawa argued that the GPRTU’s assessment of transport fares should take into consideration a wider range of economic factors rather than focusing solely on fuel prices.
“I understand GPRTU as a union body that the parameters considered in lorry fares are not only fuel. There is also the issue of the exchange rate because of spare parts. There’s an issue of insurance and all other things that come into it,” he said.
According to him, the relative stability of the Ghanaian cedi in recent times should also be considered when determining whether transport fares need to be increased.
“You realise that over the period, whilst prices of crude oil are going up, you have a fairly good situation within the country; you have a situation where the cedi and everything is still very fairly stable,” he said.
He therefore questioned the basis for automatically increasing transport fares every time fuel prices go up.
“And so, it is unfair that anytime there’s in fuel prices, you have lorry commercial drivers at to increase,” he said.
Mr Bawa acknowledged that the Ministry of Transport works together with the GPRTU in determining the thresholds for transport fare adjustments.
He explained that a fare increase is considered when the relevant combination of factors reaches the required threshold.
He therefore urged the GPRTU to consider the broader economic situation when assessing the need for an increase.
“I think that is the reason why, and I want to believe that GPRTU also knows these factors, and maybe they could add that to it,” he said.
The GOIL Chief Executive also said the company has a responsibility to help transport operators keep fares under control.
“But of course, as for GOIL, as a company, we must also be seen to be making the work of GPRTU and all other driver unions a bit easier for them to be able to insist on their drivers not to increase, having factored in when we are taking our price,” he said.
Mr Bawa admitted that developments on the international oil market continue to put pressure on oil marketing companies.
“Anytime I see this, consistently you see that I am on my phone and the TV is on either CNN or other networks, just to see what is happening,” he said.
He said geopolitical developments remain a major concern for oil marketing companies because of their potential impact on petroleum prices.
“As a provider of petroleum products to customers, you want to ensure that your customers are not overly burdened because of the pricing,” he said.
