The Minister of Energy, Mr Albert Kan-Dapaah on Wednesday denied media reports accusing government of over-recovery of petroleum costs through the recent increase in fuel prices.

Speaking at a press conference on accusation of petroleum fraud, the Minister said such allegations had sought to malign government's sincerity in respect to the truth and transparency of the numbers used to set the new prices.

"The Ministry is of the opinion that these allegations and the platforms on which they are made would end up confusing the general public, who would believe the rather serious flaws put out by these publications, public announcements, posters and others," Mr Kan-Dapaah stressed.

Mr Kan-Dapaah said most commentators on the issue of the petroleum prices did not have a clear understanding of the pricing issue.

He said the first misunderstanding of commentators' stemmed from the false equation of matching ex-refinery price with Cost Insurance and Freight (CIF) prices, neglecting related charges, which were necessary to complete the procurement process of importing fuel into the country.

"In fact, the ex-refinery prices is the CIF in addition to the related charges," the Minister stressed and added that these charges must be reflected in any cost build-up as a fundamental principle of trade and commerce.

"This constitutes a major omission, which creates a significantly serious understatement of the cost of delivering products to the Tema Oil Refinery," Mr Kan-Dapaah said.

He said the omitted related charges constituted about 20 per cent of the cost of bringing the products into the country and included demurrage charges, letter of credit and other financing charges, inspection and quality testing fees, storage costs, among other charges.

The Minister explained that although there were different price references for use, the country had chosen FOB Med Price reference published by Platt's because of the higher quality of specifications and lead content, which were similar to the premium gasoline the Tema Oil Refinery produces and markets.

He said the Socialist Forum, which had been at the forefront of these attacks on government for the fuel price formula used the Rotterdam ARA Price reference in its computation, saying, that "does not meet the requirements of the country since it was of lower quality and generally cheaper than premium gasoline."

Besides the prices quoted by the Socialist Forum reflected those for US gallon, which is equivalent to 3.785 litres while the Ministry of Energy's unit of measurement is Imperial Gallon (4.54609 litres).

In addition, most figures that were quoted in relation to the prices totally ignored cross subsidy of 1,840.61 cedis that was embedded in the formula in favour of diesel to support mass transportation, industry and food haulage purposes, kerosene for poverty alleviation projects in rural communities, LPG and premix fuel.

Mr Kan-Dapaah said the government was opened to provide information to those who needed them, saying that government should be allowed to manage the energy sector in the steady manner that it was doing to make it sustainable in the future.