Fuel relief must go beyond short-term cuts – Prof. Peprah advises gov’t

A Professor of Finance at Andrews University, William Peprah, has called on the government to move beyond short-term fuel price interventions, insisting that a more structured medium-term approach is necessary to ensure economic stability and effective fiscal planning.

His comments follow a recent government directive to suspend certain fuel taxes for four weeks, subject to review depending on global oil price movements amid rising geopolitical tensions in the Middle East.

Speaking in an interview on The Pulse on Tuesday, April 14, Prof. Peprah cautioned that frequent or short-lived relief measures are not sustainable and could undermine broader economic management efforts.

According to him, fuel pricing decisions should not be treated as isolated interventions but must be integrated into a comprehensive economic framework that includes budget adjustments, revenue projections, and expenditure controls.

“The short-term proposal for four weeks is not feasible. The world is not going to end now,” he stated, arguing that global economic shocks—such as conflicts and supply chain disruptions—typically take months, not weeks, to stabilise.

He stressed that even minor global disturbances in oil supply can have prolonged ripple effects on national economies, making it essential for governments to adopt stable and predictable policy responses.

Prof. Peprah recommended that fuel price interventions should be tied to a medium-term strategy spanning three to six months, allowing for better planning, policy consistency, and fiscal discipline.

Meanwhile, policy think tanks including IMANI Africa, COPEC Ghana, and the Institute for Energy Security have called for a reduction of GH¢1.65 per litre in fuel prices to provide relief to consumers.

However, Prof. Peprah maintained that any such relief must be accompanied by a broader fiscal adjustment strategy. He warned that reducing fuel taxes without corresponding expenditure cuts could widen the fiscal deficit and jeopardise the government’s 2026 budget targets.

“We must align our expected revenues with expenditure so that the 2026 targets can still be achieved,” he emphasised.

Economic analysts note that Ghana’s fuel pricing remains highly sensitive to global oil market dynamics, exchange rate fluctuations, and domestic tax policies, making long-term planning crucial for maintaining macroeconomic stability.