What appears to be a crippling shortage of petroleum products on the local market, particularly gasoline and diesel, has hit the country and is being widely reported in the media. Prices are now being hiked amid plentiful speculations that the price of gasoline is to shoot up to 800 LD per gallon. In the face of the glaring shortage, the Liberia Petroleum Refining Company (LPRC) management has declared that there is no shortage of petroleum products on the market, accusing but stopping short of openly calling names of suspected hoarders of petroleum products.
But if there is indeed adequate supply of petroleum products on the local market, then why is there a glaring shortage which has apparently shot up the price of gasoline at the pump? If the shortage is the result of hoarding, then what is the government doing about it? Who are the hoarders and why are they hoarding? Are they hedging their bets against an anticipated price increase as speculated?
There are credible suggestions that an additional tax surcharge has been or is proposed to be imposed on every gallon of gasoline or fuel purchased. It can be recalled that a Road Fund Tax was passed by the Legislature during the tenure of the last government, increasing the pump price of petroleum products. An Inter-Ministerial Steering Committee (IMSC) was established to collect taxes raised under the scheme.
Two major petroleum importing outfits, the Srimex Oil and Gas and the Aminata Corporation refused to pay and mounted a legal challenge arguing that the IMSC was acting in contravention of the law.
The IMSC had set projections at 30m for the fiscal period, 2017-2018. To realize this sum, they set a US$0.25 (25 US cents) to be placed on every gallon of petroleum products brought into the country. The IMSC however authorized the Liberia Revenue Agency (LRA) to collect the money on its behalf directly from importers to support the 2017 budget.
The LPRC at the time agreed to surrender 25 cents of the US$0.50 (fifty US cents) it was receiving as storage fees on every gallon of petroleum product. It can be recalled that the imposition of that tax led to a hike in road transport fares and a corresponding increase in prices of commodities on the local market. And now, speculations are rife about official plans to increase the surcharge on petroleum products for reasons which remain unclear at this point.
For a country richly endowed with mineral resources, there are questions why the Liberian government derives the bulk of its revenues from the imposition of user taxes rather than from the country’s rich mineral resources. The Weah government should consider this issue as a matter of top priority.
He has the choice to either explore creative ways and means by which his government can raise revenue and derive the spinoff benefits of social harmony and cohesion or impose the additional surcharge and face the possibility and consequences as well, of a steep rise in the cost of living and his eventual alienation from his support base.
Admittedly, these are challenges, most of which this government inherited. This newspaper recalls that former Deputy Finance Minister, Alvin Attah, at the time, weighing in on the legal challenge to the imposition of the Road Fund tax, mounted by Srimex, noted in a letter to the Chief Clerk of the House of Representatives the following: “In view of this, the Road Fund is stalled. We run the possibility of a budget shortfall if this situation persists. It affects our ability to receive the matching fund from the MCC Compact, which would impede on the World Bank’s ability to work with the Liberian government to secure private financing to pave the 215km road from Ganta to Zwedru as well as the 10km road from Zwedru to Toe Town.”
As can be seen, the imposition of a Road Tax Fund debuted during the tenure of the Sirleaf administration. As a matter of fact, the law establishing the National Road Fund was passed by the National Legislature on December 12, 2016, well before George Weah became President. Observers believe this fund, like others, was nothing more than a cash cow for past officials who could dip in at will. It all has to do with money and some (noblesse oblige) believe they have an inherent right to plunder the country’s wealth.
Former LRA Commissioner, Elfrieda Tamba reported, as of June 2017-May 2018, the LRA had collected a total of US$428.22 million with the bulk coming from user taxes. While most Liberians, it would appear, support the idea of a Road Fund tax, they nevertheless appear wary of such ventures mainly because funds realized under such a scheme usually end up in the pockets of government officials while the poor are left to bear the burden.
Revenue derived under the Road Tax Fund and how it has been expended remains unknown. It is also unclear just how much has been realized under this Road Tax Fund since it received Legislative approval in 2016. Given the burdens and strains imposed on the people by the application of this tax, it would behoove this government to take a closer look at the Fund with the view to either repealing it or reducing it considerably.
Against the backdrop of heightened public concern about the missing billions, President Weah should step back for a moment and reflect on public concerns about waste and ostentatious flaunting of sudden wealth by his officials, like those who took their families on an all-expense paid visit to China, including those now buying luxury homes in Accra and other places.
He should be constantly reminded of the words of Mahatma Ghandi, “Live simply so that others may simply live”. Leaders who have ignored the true and full import of the wisdom cached in these words have done so only at their peril.