July 1, 2021
As they increased the pump prices of petroleum products from Le8,500 to L9,500, the Petroleum Regulatory Agency (PRA) has made it clear to journalists that, the prices of petroleum products are determined by a combination of the international oil reference price and foreign exchange rate and that Sierra Leone has no hands in that.
Comparatively, according to PRA, Sierra Leone has the lowest pump prices of petroleum products in the Sub-Region, and that such is largely due to government’s intervention taking into consideration the plights of the public.
“Inspite of global price increases, the Government has kept the pump prices unchanged at Le7, 0000 per litre. This is far lower than per litre prices in the entire sub-region,” states PRA.
According to the Executive Chairperson of the PRA, the Le8,500 price per litre of fuel was largely artificial,and that government has been very sensitive to the plights of the public and has been subsidising to stabilise the prices.
“Between May and December 2020, although there were oil price increases all over the sub-region and in the world, the government did not allow the high costs to be passed on to the poor consumers. The government suspended the automatic pricing adjustment mechanism since May 2020 to date. Government has intervened by injecting about Le66bn during this period and Le17.43bn in January 2021 to support the pump price stabilization .Since May 2020 to June 2021 government has intervened by injecting Le132.11bn to stabilize the pump price.”
In their justification to increasing the pump prices for petroleum products and hopefully remove government fuel subsidies, the PRA noted that a significant portion of benefits from fuel subsidies are not received by the intended beneficiaries in Sierra Leone.
“The products are captured by smugglers and black-marketers. It is more profitable for smugglers to buy subsidized fuel domestically on black market, and the n smuggle it and it at market rates in neighbouring countries. This means that our stock have been depleted faster and led to shortage and panic buying.”
The PRA noted that because of the lower fuel prices in Sierra Leone, relatively below regional average, it is obvious that government is currently subsidizing neighbouring countries and other large corporate companies.
Meanwhile, government allayed the fears of the public that nobody would just increase transport fares without following government regulations.