Capping fuel prices wrong policy, says BoG

The Governor of the Bank of Ghana (BoG) has said the country should be pushing towards full cost recovery to minimise the burden on the budget

Dr Ernest Addison, the Governor of the Bank of Ghana (BoG), has said capping fuel prices is a wrong policy.

There have been calls for the government to intervene and cap the prices of fuel to cushion consumers.

But speaking at the 108th MPC press briefing in Accra on Thursday (6 October), Addison said, “Capping fuel prices is not an innovation. In fact, it is a wrong policy. When you have fuel prices rising and you also have a budget deficit problem, who is going to pay for the difference of the cost of fuel?”

“That will create further fiscal subsidies and worsen your fiscal deficit problem that we are all trying to resolve. So on the contrary, we should really be pushing towards full cost recovery to minimize the burden on the budget,” he added.

Oil prices held near three-week highs on Thursday after OPEC+ agreed to tighten global crude supply with a deal to cut production targets by two million barrels per day (bpd), the largest reduction since 2020.

Brent crude futures edged down 16 cents, or 0.2%, to US$93.21 per barrel by 1020 GMT after settling 1.7% up in the previous session.

U.S. West Texas Intermediate (WTI) crude futures lost 14 cents, or 0.2%, to US$87.62 after closing 1.4% up on Wednesday.

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