Insurance cost has largely remained stable – NPA boss on transport fare pressure

The CEO of the National Petroleum Authority (NPA), Godwin Edudzi Tamakloe, says insurance costs for transport operators have remained largely stable despite growing pressure on the sector. He said the biggest cost pressure currently affecting transport operators is fuel. His comments come as Ghana’s latest fuel price increases have intensified calls for higher public transport fares.

The NPA raised the price floor for petrol to GH¢16 per litre and for diesel to GH¢16.77 per litre from September 16. Several Oil Marketing Companies have since raised their pump prices. The GPRTU has also proposed a 30% increase in transport fares, citing rising operating costs.

The proposal is still being reviewed through engagements with government. Speaking on Joy News’ PM Express Business Edition on Thursday, Mr Tamakloe said he was concerned about the potential impact of higher transport fares on consumers and inflation. He said the NPA and the Transport Ministry had been engaging transport operators to assess their actual cost pressures.

According to him, there are three key areas transport operators consider when determining their operating costs. “First of all, for the transport business, there are three essential things that you always want to look at: the cost of maintaining the freight, the cost of spare parts.” He added that fuel and staff costs were also important components. “Not only that, the cost of running the business, that’s fuel cost.

How much they pay their drivers and mates is always known, and often for a whole year there are no serious increases.” Mr Tamakloe said insurance had not recorded significant increases during the period. “Insurance cost has largely remained stable,” he stated, adding that the major change in the cost structure had been fuel. “What has become impactful now has to do with the fuel price.” He also pointed to the stability of the cedi as another factor that had helped limit some operating costs, particularly for imported spare parts.

The cedi’s stability has absorbed potential costs for you on the forex front. That’s government’s intervention.” Mr Tamakloe said government had also been intervening to cushion the impact of fuel price increases. “So the issue now has to do with this.