The National Petroleum Authority (NPA) has reversed the suspension of the Price Stabilization and Recovery Levy on the price build-up of petroleum products. This was captured in a letter dated April 3 2024 to the various players in the oil marketing and distribution industry seen by JOYBUSINESS.
The NPA in the letter directed all the Oil Marketing Companies and the other players that from April 4 2024, they should now apply 16 pesewas per litre on Petrol, 14 pesewas per litre on Diesel and 14 Pesewas on every Kg per Liquefied Petroleum Gas (LPG).
It is unclear what influenced the National Petroleum Authority to revise the suspension of the Price Stabilization and Recovery Levy.
Background
The National Petroleum Authority in a letter on March 28 2024 announced the suspension of the Price Stabilization and Recovery Levy (PSRL) on price build-up on petroleum products. This froze the implementation of the levy charged on every litre of petroleum products and Kilogram of LPG from Monday, April 1 to June 30 2024.
According to the National Petroleum Authority, this was based on a directive from the Finance Ministry working with the Energy Ministry.
Impact
The action by the National Petroleum Authority could result in prices of various petroleum products going up again from 4th April 2024. This is because the adjustments witnessed already at the various Oil Marketing companies from April 1 2024 did not factor the Price Stabilization and Recovery Levy on their price build-up. However, based on these changes, 16 pesewas will now be added to every litre of petrol, 14 pesewas per litre on diesel and 14 pesewas on very Kg per Liquefied Petroleum Gas, LPG.
Some of the Oil Marketing Companies have told JOYBUSINESS they will adjust prices again for the pumps from April 4, 2024.
The Price Stabilization and Recovery Levy
The Energy Sector Levies Act 2015 (Act 899) allows the National Petroleum Authority to stabilise petroleum product prices for consumers over a certain period.
It currently charges 16 pesewas per litre for petrol, fourteen pesewas per litre (GHp14/Lt) for diesel and 14 pesewas per kilogram (GHp14/Kg) for LPG.
The government had in recent times used the suspension as an intervention to cushion consumers of petroleum products from rising prices on the international market. That is whenever prices hit a certain level that could hurt consumers, then the government freezes the application of this levy on prices of petroleum products.
However, when prices drop to a certain level, the levies are restored.
