There have been mixed reactions to government’s announcement of a 26% reduction in the cost of gas to businesses that rely heavily on the product.
While industry has wholly welcomed the move, some industry analysts have cautioned against the outstanding debts facing institutions involved in the supply of gas.
Citi Business News spoke to a couple of players involved in the sector and their perspectives have been backed with strong arguments which suggest possible ways that the government could use to ensure maximum benefit of its intended programme.
President Nana Addo Dankwa Akufo-Addo first mentioned the reduction at the Commissioning of the Twyford ceramics factory at Shama over the weekend.
Per the reduction, businesses would buy a million British Thermal Units of gas at 6 dollars 50 cents, down from the 8 dollars 84 cents.
This also translates into some 26 percent reduction.
For industry, this is pleasant news, as it will ultimately reduce the cost of power hence their operational costs.
Chief Executive Officer (CEO) of the Association of Ghana Industries (AGI), Seth Twum Akwaboah, said: “The reduction is good for businesses and it has positive impact on the cost of electricity and therefore reducing the cost of production and we consider that to be important for businesses and I also like the President’s emphasis on industrial consumers.”
But the Executive Director of KITE, Ishmael Egyekumhene, and the Vice Chairman of the Public Interest and Accountability Committee (PIAC), Kwame Jantuah, share divergent views on the immediate benefits of the move.
Mr. Egyekumhene explained possible reasons for the reduction as, “There is a foundation volume of gas that the Jubilee partners give to the government at no cost but in the build-up, GNPC actually charges Ghana Gas for the gas supplied.”
Mr Jantuah believes otherwise as he argues that, “It sounds like the government is trying as much as possible to satisfy Ghanaians through words but the government needs to be clear and explain to the people that for certain reasons, they will be able to reduce gas rates by a certain percentage.”
Business Desk