Business in Ghana

We Understand the issues that make the News

The Idiots of January. Critical News, 11th January 2015

Posted by Business in Ghana on January 11, 2015

Sydney Casely-Hayford,

By 16th June 2014 we were paying ghp273 for a liter of premium fuel. Today it is costing us ghp305. On that date the cost of crude oil on the international market was $114 a barrel. Oil now costs close to $50 a barrel. Over 56% drop in price.

That change from ghp273 to ghp305 does not represent a 10% drop in the price of petrol at the pump. If you benchmark the cost to a later period, say 1st December, the ex-pump price was ghp339 for a liter. The cost to the consumer went up ghp66 from that period.

After automatic price hikes between June and December from ghp273 to ghp339, our Government would want us to believe that it is doing us a big favor by reducing the ex-refinery price of petrol by 10%.

To arrive at the ex-pump price of petrol, which is where we feel the pinch in our pockets, the law adds taxes, levies and margins to an ex-refinery price and the National Petroleum Authority advises Government of the true cost of delivering petrol to the retailing companies such as Shell, Total, Goil etc.

In this situation, Government then makes an illegal add-on or subtraction to arrive at the ex-pump price. This so-called price stabilization margin is a politically decided figure and has been used by all Governments to court voting favors from the masses.

The idiot’s guide to calculating an economic price of the most important product in our life is simple. There is a law and we must follow the law and allow it to work. Adjusting the cost build up under the guise of mitigating losses chalked up by the very same government that has broken the law should not be acceptable.

Bulk Distribution Companies (BDC’s) are crying foul and asking Civil Service Organisations to hold fire while Government uses the windfall gain from the crash of oil prices to pay them their due.

There is some doubt whether the figure owed the BDCs is ghc215million or ghc1.3billion. And there is a credibility problem for Government, who created the debt, and after all this while still cannot release the reconciliation audit by KPMG to us, the owners of the debt.

World fuel price is close to $50 a barrel and shows no signs of going up as long as the US and Saudi Arabia follow the trajectory of their supply strategy. US is delivering its shale oil volumes and Saudi’s are adamant they will not reduce the supply to the market.

While Russia, Iran, Venezuela etc. suffer the low prices, terrorist organizations such as Al Qaeda, ISIS and Boko Harram, should also feel the pinch, as the continuing support from governments with large oil surpluses starts to dry up.

But Tullow, Anadarko and Kosmos, exploring the West Cape Three Points fields and other TEN fields coming on stream are bound to start worrying as there must be a price below which production becomes unviable. What is that price? It is similar to gold companies such as Anglogold having to shut down the Obuasi mine because the selling price on the market is not high enough to sustain the cash cost of production.

So if ENI continues to explore the gas reserves in the West Cape reserves, we expect that the savings from the lower cost of crude and increased gas supplies should benefit the consumer where it matters most and that will be the utility prices of electricity and LPG, which must filter down to the consumer through cheaper food in the market.

If this is not achieved, you can write off any pass-through to the regular person on the street and economic activity will stay depressed.

In my simple analysis, what you need is cheaper goods all round, cheaper food made available and cheaper inputs to manufacturing. Once economic activity picks up, taxes must be better collected and Government revenue must increase.

Anyone who cannot see this equation is an economically redundant idiot. It is historically proven that you cannot tax a country out of an economic crisis.

Which brings me to the unnecessary and idiot tax of 17.5% on financial services. This tax was set aside soon after May last year, after a lot of hue and cry from the public. Once again, some idiots in the Finance and Tax administration think January is best suited to resurrect the tax, when we have a fight over fuel prices and the cost of living is still exceptionally high.

Somebody, out of lazy desperation to generate additional revenue is not thinking about a more innovative way.

We have made many suggestions that time is ripe to put in place better mechanisms to formalize the informal sector. It kind of floated out of the 2015 budget and landed in the same bucket as the idea to tax religious organizations, which generate additional income from services other than a gathering to worship.

You see, we have to make a case that when a lying pastor collects money under the guise that they will provide you a spouse through prayers, chanting and fasting; when they promise to get you a visa through extra anointing; that money is not of worship as defined in the various books of the religions, so it must be taxed. I suggest the rate for this kind of service should be 50%. That will get government plenty “spiritual tax”, which is more sanitised money than 17.5% “Satanic VAT” on financial services.

Fiifi Kwetey is a paid employee of the people of this country. He draws a salary from the public purse, rides a car with fuel provided by you and me. He sleeps in a protected house catered by servants and is guarded by our money.

And as a beneficiary of all this largesse, he travels on our ticket and collects a dollar per diem allowance every time he steps out of this country. Every time he leaves our protected home to negotiate or attend a conference for something we pay him for, we pay him again to be away from the comforts of a home we have given him.

Despite all this free stuff, he finds a reason to rant on a platform and insult we, his employers in satanic verses. His blinding adulation of JDM notwithstanding, because of course that is where his bread is cozily buttered, his attack on the OccupyGhana movement as a bunch of hypocrites hiding under a movement to promote a political agenda will be answered.

We have no intention of letting this go, and even as we busy ourselves with the Auditor General and now the National Petroleum Authority, and we have many other institutions lined up in 2015 and 2016, we will let him understand what we think of him and his ilk.

Ghana is moving on with a different vision. No longer satisfied with the political nonsense and corruption from NDC to NPP, we will contribute our mite to a democratic cause to ensure that once and for all, there will be a cleaner, more sanitized system and processes to ensure we never again turn tail to borrow money and import food to sustain our lives.

The NDC has governed this country longer than any party and if we have a mess on our hands it is more their doing, brought on by low-serving persons, who clearly do not have decent and moral judgment.

It is time for another, with a better and clearer sense of destiny.

Occupy Ghana is going to run the gauntlet to the end. We have replied the Auditor General and we are preparing for the National Petroleum Authority. While at it, we will consider this idiot’s tax on financial services.

But Ruby Nayele Ametefeh wants us to believe that despite her peddling drugs that will affect and destroy the lives of several persons in the world and also many children whose lives will be devastated as they fall prey to drugs and pimps, her concern as a mother is for her three children as she serves her eight-year eight-month term and her mother assaults law officers appointed to do their job.

Even as she makes it possible for other children to be traumatized for life, she prays that her own will be safe from all evildoers. January idiots will make my list this year.

Ghana, Aha a ye din papa. Alius atrox week advenio. Another terrible week to come!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: