ACCRA, Feb 17 (Reuters) - Ghana cut fuel subsidies on Sunday as its new government took measures to curb spending after the West African exporter of cocoa, gold and oil overshot its budget deficit target by almost 100 percent last year.

The National Petroleum Authority (NPA) said in a statement that fuel price hikes were necessary to cover the cost of an increase in crude oil prices and the depreciation of the local cedi currency by about 14 percent last year.

The new prices, which took effect on Sunday, saw premium petrol and diesel prices jump 20 percent per litre in cedi terms, while Liquefied Petroleum Gas (LPG) rose 50 percent.

Prices of kerosene, marine diesel and residual fuel oil also increased 15 percent per litre.

The decision to cut subsidies came days after Fitch rating agency revised the nation's outlook to negative from stable, citing the severe deterioration of its fiscal deficit.

"The government has funded the budget deficit mainly through borrowing at high interest rates on the domestic market, at 22.8 percent for 91-day T-bills," the agency said on Friday.

"While current expenditure has surged, the share of capital expenditure has fallen, which could harm longer-term growth prospects and worsen debt dynamics," Fitch said.

Decisions by governments in the region to cut fuel subsidies have previously led to social unrest. Nigeria's government was forced last year to reinstate some subsidies it had cut after several days of strikes and protests, while Ghana's last attempt to cut subsidies more than two years ago resulted in opposition-led street protests.

http://mobile.reuters.com/article/idUSL6N0BH0TZ20130217?irpc=932

I have always said that maintaining subsidy for fuel is not feasible for any serious government.

These subsidy cuts are obviously not limited to Nigeria. In recent times Ghana, Sudan, Indonesia and India have battled with cutting fuel subsidies as a means of better management of their resources and encouraging energy generation from renewable sources.

The best short-term measure we should undertake, in the interest of the masses, is not to remove the subsidies all at once, but to shift the subsidy to those who are willing to refine in the country.

Look at this first two clowns to comment.

outrage: Look at this first two clowns to comment.

The definition of a clown is one who calls others clowns, while adding nothing to the topic at hand.

Why don't you make your own comments on the topic and/or move on? Or is an intellectual discussion beyond you?

This as usual will dwindle the popularity of the ruling government but one thing is that Ghanaians will be more objective in the analysis and response to the situation unlike Nigeria where the opposition will take a swipe on the situation to shine and misinform our people who are almost frustrated at several years of misrule. But I think Africans should be braze for economic revolution via reforms why we demand accountability from our leaders. No serious govt can sustain subsidizing premium motor spirit in this age of huge economic challenge and I am of the opinion that we must not always be negative about our leadership.

We all saw how the state that accommodated the Nigeria subsidy protest suddenly increased school fees by more than 1000% (ie removing education subsidy) and put a toll gate on an uncompleted road and used police to chase away the protesters of the toll gate. They have erected another toll gate on the same uncompleted road again and everywhere is quiet. If this was done by GEJ, DAM or NOI, by now, twitter and facebook would have crashed from the insults hurled at them.

Fuel Subsidy regime is a government of the Rich/Middle Class over the average poor Nigerian. To be fair to all Nigerians, what we need is free FUEL VOUCHER for certain quantity of fuel for every citizen who is 18 years and above.

This voucher should be transferable, enabling the poor to sell their vouchers to whoever that needs it for equality and fairplay.

Nigeria needs an authentic Database Record to harness it's governmental roles to the citizenry.

Sunny_bobo: I have always said that maintaining subsidy for fuel is not feasible for any serious government.

Please cut all the major salaries and allowances that our leaders are enjoying, the money they are looting as well, fix the refineries, then come back to us and we can talk about the fuel subsidy.

Their own is still better because in terms of electrification dey ar better dan Naija so poor masses will not complain 2 much.

HNosegbe:

The definition of a clown is one who calls others clowns, while adding nothing to the topic at hand.

Why don't you make your own comments on the topic and/or move on? Or is an intellectual discussion beyond you?

This is what I wanted to say but was too lazy to type.

hercules07:

Please cut all the major salaries and allowances that our leaders are enjoying, the money they are looting as well, fix the refineries, then come back to us and we can talk about the fuel subsidy.

Elueme: Ghanaians will be more objective in the analysis and response to the situation unlike Nigeria where the opposition will take a swipe on the situation to shine and misinform our people who are almost frustrated at several years of misrule.

What we do in Nigeria is not subsidy but enrichment of political associate and if we are so objective as u have wished, my brother our leaders will take the food on our table and give it to their political associate to resell it to us.

outrage: Look at this first two clowns to comment.

Sick fellow

Sunny_bobo: We all saw how the state that accommodated the Nigeria subsidy protest suddenly increased school fees by more than 1000% (ie removing education subsidy) and put a toll gate on an uncompleted road and used police to chase away the protesters of the toll gate. They have erected another toll gate on the same uncompleted road again and everywhere is quiet. If this was done by GEJ, DAM or NOI, by now, twitter and facebook would have crashed from the insults hurled at them.

Classic hypocrisy, they claim to have ideology but in reality they are neither here nor there.

I'm tired of discussing this issue of fuel subsidy. Certainly, any attempt to bring up the issue of fuel subsidy removal before 2015 will see the resurrection of failed politicians, emergency civil society groups, black market activists, brown envelope media organisations,etc

The only chance of total removal of fuel subsidy in Nigeria before 2015 appears to be thru legislation (PIB). The alternative is to totally remove fuel subsidy post-2015.

I'v always been an advocate of fuel subsidy removal because I believe it is wrong policy to subsidize consumption. Subsidy should be moved from consumption to production

Sincere 9gerian: I'm tired of discussing this issue of fuel subsidy. Certainly, any attempt to bring up the issue of fuel subsidy removal before 2015 will see the resurrection of failed politicians, emergency civil society groups, black market activists, brown envelope media organisations,etc

The only chance of total removal of fuel subsidy in Nigeria before 2015 appears to be thru legislation (PIB). The alternative is to totally remove fuel subsidy post-2015.

I'v always been an advocate of fuel subsidy removal because I believe it is wrong policy to subsidize consumption. Subsidy should be moved from consumption to production

You believe it is a wrong policy to subsidize consumption, yet you paid master is fed with N1bn yearly Even the most advanced economies subsidize consumption so what are you on about? What most people still do not realize is even if Nigeria was producing all of her petroleum products, the FG would still need to subsidize it in various ways in order for the commodities to be available to ordinary Nigerians cheaply. Do you think it would cost the same amount to sell fuel closer to a depot than the remote parts closer to Chad? The obvious answer is No, so FG would still have to take the brunt of the cost getting the products down there.

Subsidy becomes a burden when dishonest men abuse it for their selfish aim. There are even other economics one could come up with that would warrant FG subsidizing fuel and yet Nigerians and Nigeria will live a healthy life.

The main reason the current subsidy is weighing down the economy is because the FG is dishonest with the cost of subsidy, and the whole scheme is a fraud of an epic proportion.

Omo_Tier1:
You believe it is a wrong policy to subsidize consumption, yet you paid master is fed with N1bn yearly Even the most advanced economies subsidize consumption so what are you on about? What most people still do not realize is even if Nigeria was producing all of her petroleum products, the FG would still need to subsidize it in various ways in order for the commodities to be available to ordinary Nigerians cheaply. Do you think it would cost the same amount to sell fuel closer to a depot than the remote parts closer to Chad? The obvious answer is No, so FG would still have to take the brunt of the cost getting the products down there.

Subsidy becomes a burden when dishonest men abuse it for their selfish aim. There are even other economics one could come up with that would warrant FG subsidizing fuel and yet Nigerians and Nigeria will live a healthy life.

The main reason the current subsidy is weighing down the economy is because the FG is dishonest with the cost of subsidy, and the whole scheme is a fraud of an epic proportion.

I'm sure if it were APC or Fashola that was removing the fuel subsidy, you would not only have supported it but also given us a thousand reason why the subsidy removal is sweet. This is just one example of how deceitful and mischievous some of the few but noisy critics have been.

The Fashola I know, if he was the one elected as president in 2011, would have also tried to totally remove the subsidy as SOON AS POSSIBLE.

Hypocrisy unprecedented!

They did the same thing last year, and had to reverse themselves because like Nigeria there was no preparation and no "real" measures to cushion the impacts.
I hope they did their homework this time, otherwise expect protests like last year, and then a reversal.
I don't know why African governments never learn that citizen welfare comes first!!!

HNosegbe: These subsidy cuts are obviously not limited to Nigeria. In recent times Ghana, Sudan, Indonesia and India have battled with cutting fuel subsidies as a means of better management of their resources and encouraging energy generation from renewable sources.

The best short-term measure we should undertake, in the interest of the masses, is not to remove the subsidies all at once, but to shift the subsidy to those who are willing to refine in the country.

All it requires to handle this subsidy thing is to prepare properly and seriously address citizen welfare effects.
If APC or Fashola does that they will be successful.
We were trying to tell Mr. Transformation the same thing last time.
But the Beafs of his world clouded, and continue to cloud his reasoning faculties.
As Yorubas would say, "the motherless boy should guard against back wounds" or he will learn the hard way.

Sincere 9gerian:
I'm sure if it were APC or Fashola that was removing the fuel subsidy, you would not only have supported it but also given us a thousand reason why the subsidy removal is sweet. This is just one example of how deceitful and mischievous some of the few but noisy critics have been.

The Fashola I know, if he was the one elected as president in 2011, would have also tried to totally remove the subsidy as SOON AS POSSIBLE.

Hypocrisy unprecedented!

Sincere 9gerian:
I'm sure if it were APC or Fashola that was removing the fuel subsidy, you would not only have supported it but also given us a thousand reason why the subsidy removal is sweet. This is just one example of how deceitful and mischievous some of the few but noisy critics have been.

The Fashola I know, if he was the one elected as president in 2011, would have also tried to totally remove the subsidy as SOON AS POSSIBLE.

Hypocrisy unprecedented!

You have the guts to called somebody an Hypocrite?
What a dunce.
Anyway, Patience Jonathan was not Hospitalised isn't it?
You are needed on that thread.
Why are you avoiding it?
See ya life fall yakata for Ground.

Sunny_bobo: I have always said that maintaining subsidy for fuel is not feasible for any serious government.

This mentality is so skewed.
What's the assurance that the removal of subsidy will bring about growth if corruption still thrives in government?

Check your facts. Saudi Arabia subsidizes fuel and her government is way more serious than these african presidents that swallow all what the West throws at them.

The decision to cut subsidies came days after Fitch rating agency revised the nation's outlook to negative from stable , citing the severe deterioration of its fiscal deficit.

Read the bolded again. Fitch, a Western tool, cuts Ghana's rating to negative and all the government could do was to remove subsidy so that when the benchmark price of oil increases, the government has no business in paying a little so as to help the poor and the needy. In the West where subsidy doesn't exist, they cater for the unemployed, their citizens have access to good healthcare and food. Africa is yet to provide these benefits for its citizen, yet the only benefit they get for having a democratic government is being snatched away.

This is Africa! We need a "collective" responsible government to bridge the gap between the rich and the poor while fostering development. Poco a poco when a good number of citizens can stand on their own, we can now start reducing governments 'help'.

Let's see if Ghana will become the next Zurich or Dubai because it has removed subsidy. Nigeria that's removed a lil, what has she done with the money?



Frawzey

While I do not support subsidy, however, I believe govt should have a forum where people can easily write-off a certain amount of fuel expense. Subsidy has and will never be sustainable in the long run, but cushioning the effect is what's important.

Sunny_bobo: I have always said that maintaining subsidy for fuel is not feasible for any serious government.

What we need to do in this country is stop the maintenance of corruption!

It has become obvious that Ghana is under the control of the world bank and IMF

Let us hope that the new president does not go on to destroy Ghana the same way that Thief Obasanjo destroyed Nigeria.

Sincere 9gerian:
I'm sure if it were APC or Fashola that was removing the fuel subsidy, you would not only have supported it but also given us a thousand reason why the subsidy removal is sweet. This is just one example of how deceitful and mischievous some of the few but noisy critics have been.

The Fashola I know, if he was the one elected as president in 2011, would have also tried to totally remove the subsidy as SOON AS POSSIBLE.

Hypocrisy unprecedented!

I know you are intellectually deficient so I would not bother responding to your silly rants.