Liberia: Hardship looms
*As Liberia records highest gasoline price in sub-region
* Could this affect Weah’s 2023 reelection bid?
Liberians have begun bracing themselves for more hardship under the Coalition for Democratic Change (CDC) led regime days after the government announced hikes in the prices of petroleum products here.
On Monday, March 7., Government announced that the price for a gallon of gasoline previously sold at a retail price of US$4.00 is now US$5.66, an increase in price ceiling by US$1.66, while a retail price for diesel fuel, which was being sold at US$4.53, is now US$6.00, an increase in retail price ceiling by US$1.47.
The increment comes days after Government made it clear thru a circular that there were sufficient petroleum products in the country to last for months.
On Feb.14, a vessel arrived with products and departed on Feb. 16. Another tanker vessel MT BWLYNX came in last week with 12,500 metric tons of gasoline, while another vessel DUKE brought in 2,400 metrics tons-meaning there is no shortage in sight for now.
In a country with an estimated 64 percent of the population living below the poverty line of whom 1.3 million live in extreme poverty (World Bank 2020 report), and nearly 70% getting their electric power from gasoline or diesel generators, the government is under immense pressure to rethink the price ceiling.
Though it would argue that Liberia has the lowest price ceiling for petroleum products in the sub-region, comparatively it is not, rather it is the highest among its immediate West African neighbors.
With Liberia selling a gallon of gasoline for US$5.66 (L$875), in neighboring Sierra Leone a gallon of gasoline is sold for US$4.12; Guinea right next door sells at US$4.23; Ivory Coast US$4.11 and Ghana US$4.50.
What does this mean for ordinary Liberians?
The effect of the government’s action has been immediate with the prices of commodities now soaring on the local market just within days of the pronouncement; commercial vehicles are now charging double the previous transportation fares. For instance, commuters would now have to pay US$2.00 (L$300, twice more than what some live on daily), from ELWA junction to Broad Street in Central Monrovia, which was previously US$1.00 (L$150).
With the country’s unemployment ratio (This refers to the share of the workforce that are without jobs, but are available for and seeking employment) projected to increase, it’s going to have a massive effect on the population.
The country’s unemployment rate for 2020 was 3.30%, a 0.41% increase from 2019, while in 2019, unemployment rate stood at 2.89%, a 0.05% decline from 2018, according to the World Bank report. Thus poverty remains widespread.
Could this affect Weah’s 2023 reelection bid?
The increasing widespread of poverty, amidst allegations of corruption and the rampant display of wealth among some officials of government in the wake of such an increase, could negatively impact the second term bid of President George Weah and erode some of the gains he has made over the years for which some voters would have opted for him.
It is argued that Liberians mainly vote based on the bread and butter issues-meaning their ability to purchase basic needs. But with the soaring of basic commodity prices barely a year away from a major election, it’s hard to say that such will not undermine president Weah’s reelection bid.
Liberians, many first-time voters who see the president as a role model had thought that the president has come with a magic wand to change the status quo. However, poverty remains widespread in Liberia and the latest government action could just add to the fury and may work against the president unless there is a U-turn.
What is the government saying in defense of its action?
On Tuesday, March 8, 2022, the Government emphasized that its decision to set a new price structure for petroleum products in the country was not arbitrary, but one motivated by external factors.
Information Minister Ledgerhood J. Rennie said the government acknowledges that the increment is “hard to bite down”, but it is necessary to ensure the constant availability of the products on the market and the stability of the price. “We are hoping that in the next month or so, we can revisit the decision and there can be a decrease”, Minister Rennie said.
He explained that the government is aware that the cost of petroleum could have an adverse effect on the general price level, which is why it is planning to revisit the new price structure in the “soonest possible time”. He frowned on profiteering and hoarding of the products by some unscrupulous people, warning that anyone caught in the acts will be dealt with by the full weight of the law.
The Information Minister said the relevant Government agencies are working to announce fixed fares for transportation to various locations within 48 hours in order to avoid hiking the cost. He warned commercial drivers against overcharging passengers.
What did the Petroleum Refining Company say?
The Deputy Managing Director of the Liberian Petroleum Refining Company, Adrian Hoff, said importers of petroleum products in the country operate under a Collateral Management Agreement (CMA) that allows them to order products in the country without initially paying cash to the major international suppliers. But he said, once in the country, in order for products to be lifted from the LPRC storage facility each day, and taken to the market, the Liberian importers will have to pay per consignment at the prevailing global rate – thus their clamor for an increment in price.
Mr. Hoff said the Weah Administration has made tough decisions in the past to avoid increasing the cost of petroleum products by cutting levies. “We have met with the President and his biggest concern has been ‘don’t increase the price’ “.
Both men said the prices of gasoline and diesel fuel in Liberia are lower than in many countries in the sub-region.
However, figures from the sub-region dispute their claims.https://thenewdawnliberia.com/liberia-no-shortage-of-petroleum-product/–Writes Othello B. Garblah