Saturday, December 13, 2008

Fuel price cut prompts vote-buying claim

Ghana's petroleum authority cut fuel prices by 17 percent from Friday, prompting opposition allegations that the ruling party was using its influence to buy votes ahead of a Dec. 28 presidential election run-off.

The cut, announced on state television late on Thursday just a day after the run-off vote was announced, was by far the biggest in a series of fuel price reductions as world oil prices have fallen by two-thirds from record highs five months ago.

The National Petroleum Authority (NPA) normally surveys prices over the first 15 days of the month and announces any modification on the 16th or 17th.

"But here we are just on the 11th day of December, an announcement was made after an election in which the government did not do well, to assuage the people, knowing very well that voters are preparing for December 28," said Kwabena Donkor, a spokesman for the opposition National Democratic Congress (NDC).

"The move is very political because for the first time in several years, the time-frame of the announcement has been truncated," Donkor said.

The NDC's candidate, John Atta Mills, came a close second in last Sunday's presidential election with 47.92 percent of the vote, according to the latest figures.

Nana Akufo-Addo, of outgoing President John Kufuor's New Patriotic Party (NPP) led with 49.13 percent. But he lacked the absolute majority needed to avoid a run-off against Mills, despite opposition assertions that NPP politicians used state resources during a high-spending campaign. The NPP denies this.

The NPP also lost control of parliament in Sunday's polls, and some analysts say tough economic conditions played a part.


Ghanaians have seen their buying power slashed as annual inflation, driven by surging world oil and food prices in the first half of this year, shot to 18.4 percent in June, way above the 2008 budget's initial target range of 6-8 percent. After four monthly falls, the rate crept back up to 17.4 percent in November, the Statistical Service said on Friday.

The petroleum authority's chief executive, John Attafuah, rejected opposition accusations that the price cut was politically motivated. He said it had been brought forward to take effect before the weekend and avoid any shortages caused by retailers delaying purchases in anticipation of a price cut.

"I do not wish to see shortages at this critical period," Attafuah told Reuters. He said transport operators had complained previous cuts of up to 10 percent were too slight for them to cut fares. "We gave a big margin to allow transport owners to also effect the reduction in their fares so that it will impact on the travelling public."

Fuel prices are politically sensitive in Ghana. For years the government ran up debts to subsidise fuel, but it has cut the subsidies in recent years to help curb budget deficits.

Analysts say the presidential election has been particularly close-fought because both parties suspect increased prosperity from offshore oil production due to start in late 2010 could entrench the winning party in power for years to come.


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