Ghana's Energy Sector, Oil and Gas News
Special accounts for new petroleum levies
The government has set up a special account into which all new levies on petroleum products will be saved to enable it to defray the huge debt in the energy sector.
Advertisement
Presently, the energy sector debt is in the region of about US$1.4 billion, an amount which has exposed some banks badly.
A Deputy Minister of Finance, Mr Cassiel Ato Forson, who disclosed this to the GRAPHIC BUSINESS in an exclusive interview in Accra on January 6, said as per the law reviewing the taxes on petroleum, the government was bound to report on the monies accrued to Parliament every year and noted that “it is part of the measures we are adopting to ensure transparency in the use of the monies collected from the people”.
Timelines
Mr Forson said the government would “collect enough within the next two to three years to be able to defray the debt”.
The deputy finance minister could not immediately tell how much the government was expecting to rise within a year.
“What we intend to collect is substantial enough to clear the debt and we will keep Ghanaians informed through their representatives in Parliament about the progress in terms of what has been accrued and the payments made.”
New Act
Last month, the government rushed the Energy Sector Levy Bill (2015) through parliament under a certificate of emergency effectively imposing more taxes on petroleum products after it was introduced in the House. The new levies took immediate effect.
The Road Fund component of the price build-up is now GH¢0.40 per litre from the previous GH¢0.07 per litre.
Also, there is a tax of GH¢0.05 on diesel and LPG as PSM; GH¢0.28 on petrol, diesel and LPG as PIS levy; GH¢0.05 on petrol as PSM; GH¢0.05 on petrol as recovery margin, GH¢40.05 on petrol, diesel and GH¢0.23/kg on LPG as forex under recovery and UPPF at GH¢0.09 per litre.
According to the finance minister, the urgent bill was to restructure, re-nationalise and consolidate energy sector levies to promote the prudent and efficient utilisation of proceeds derived from the levies to facilitate sustainable long-term investments in the energy sector.
TOR Recovery Debt
In 2003, a similar phenomenon occurred when the then government went to Parliament to review the petroleum Act and established a Fund known as the Debt Recovery (Tema Oil Refinery Company) Fund (ACT 642) which fund was placed under the Consolidated Fund.
The object of the fund was to finance the payment of debts incurred by Tema Oil Refinery Company and interest accruing on those debts.
The monies which made up the fund included a new levy imposed on petroleum products under section 8; and other monies that may be allocated by Parliament; or received from any other source and approved by Parliament.
Under section 13 of the Act, the Minister of Finance “shall within three months after the end of each financial year, submit a report on the Fund to Parliament”.
Unfortunately, Ghanaians from whom these monies were collected over the years have no idea how much was collected and what has been paid.
In addition to procurement, handling charges, and other related charges, Parliament imposed taxes and levies on every litre of petrol including Exploration Levy of 0.1000Gp and Energy Fund Levy of 0.0500Gp.
However, the Ministry of Finance has not come clear on the amount of money so far collected under the TOR recovery levy.
Trust issues
The situation has gradually given credence to allegations that the funds which are being collected from the public to settle the debt of the ailing Tema Oil Refinery (TOR), has been misapplied.
At a recent public forum, the ministry was unable to come clear on the quantum of money collected so far to help resuscitate TOR.
The levy was introduced some 13 years ago in a bid to clear the massive debt overhang on TOR as a result what the government consistently told the public was they were as a result of under recoveries.
Role of Parliament
A cross section of the public which the paper interacted with called on Parliament to desist from being a rubber stamp to demand the reports from the government.
Meanwhile organised labour has asked the government to take immediate steps to remove the taxes imposed on petroleum products.
According to the group the withdrawal is not negotiable and failure to heed the call will result in a series of strikes and demonstrations.
The government, which has come under a barage of condemnations over the hikes in taxes instead of widening the tax net is however yet to respond to the threat. — GB
