Former Pru East MP and ex-Minister of Power, Dr. Kwabena Donkor, has highlighted deep-rooted challenges in the distribution of premix fuel, calling the system ineffective and misdirected.
His comments come in the wake of recommendations by the Petroleum Downstream Sector Reforms Committee (PDSRC), which has proposed the immediate removal of the premix fuel subsidy due to persistent mismanagement and corruption.
Speaking on Starr Focus with Naa Dedei Tettey, Dr. Donkor emphasized that the primary issue lies in the poor targeting of intended beneficiaries.
“So that is the background. It arises out of our intention of making fuel cheaper for the fishermen and accessible. Unfortunately, like most social policies that the Ghanaian state has come up with, the targeting has always been a problem. Who benefits from subsidies, targeted subsidies? Invariably, the beneficiary class happens not to be the class it was intended for,” he stated.
He cited similar issues faced during the implementation of kerosene subsidies in the late 1990s and early 2000s, when he served as CEO of the Bulk Oil Storage and Transportation Company (BOST).
He explained that instead of reaching rural and peri-urban households, subsidized kerosene was diverted to urban centers where it was used to dilute more expensive diesel for profit.
Dr. Donkor lamented that the same inefficiencies are now affecting the distribution of premix fuel.
According to him, fishermen, as a result, are resorting to buying regular fuel (Row 91) and mixing it with engine oil to power their outboard motors—a costly and inefficient alternative.
“We had the same issue with kerosene. I remember 1999, 2000, again, at that time, I was the chief executive of BOST, and BOST was the quasi-regulator. And so I was handling the fixing of petroleum prices. There was a good subsidy on kerosene in those days. The intent of the state was that since kerosene was used largely by rural folk and the urban poor, or peri-urban, it should be subsidized to make life easier.”
“However, the same kerosene, the flashpoint of kerosene is quite close to what we call diesel, gas oil, or automotive gas oil. And so we’ll find kerosene, instead of going to Yeji, instead of going to Nkwanta, instead of going to Pandai, instead of going to Bunkurugu, the kerosene found its way into gas oil in Accra, Tema, Ashaiman area. Away from the areas that really need it. They were using that to dilute the quality of gas oil because of the price differential, because it was priced lower.”
“So if you take my hometown, Yeji, or if you take the Pru East District, and the same applies to all the riverine areas along the Volta Lake and the Oti River, you get less than 10% of the premix that the fishermen need getting to them and I say that on authority. Over 90% of what they need, they don’t get. I wouldn’t say they are able to supply 100%, but they don’t get the 90% they need. So what do they do? They buy the Row 91 and then buy engine oil to degrade it for the outboard engines to use.”
