Ghana Loses $200m In Downstream Petroleum Revenue Annually

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The government of Ghana has lamented that illicit activities in the downstream petroleum sector is weighing heavily on the country’s economy, and that the country loses over $200million annually in tax revenue.

Vice President, Dr Mahamudu Bawumia, told Ghanaian Times that the illicit activities, which comes in the form of illegal bunkering, smuggling of petroleum products, and dumping of products meant for export on the local market, has become a source of great concern to the government.

“These activities constitute an emerging threat which impact negatively on our maritime security as well as the nation’s efforts in mobilising tax revenue from the sale of petroleum products,” the vice president. Dr Bawumia said the dynamics of the illicit activities in the petroleum downstream industry required a multi-pronged solution to ensure sanity in the industry, and charged the National Petroleum Authority (NPA) to enhance and sustain the already irritated technological interventions to arrest the situation.

He informed that to stem the tide, the Ghanaian government is commissioning a National Command Centre for Electronic Cargo Tracking System to monitor huge petroleum tankers from loading points to delivery stations to prevent haulage theft and diversions. The tracking system aims at improving standards and efficiency in the industry.

He said the government believed in the use of appropriate technology to improve product and service delivery, hence the introduction of the tracking system was very appropriate and timely, adding that the adoption of new technologies has helped improve quality of life, work and leisure.

“We have many examples where the application of technology has also helped to improve productivity and allows the industry to remain competitive, provides better job security and creates more employment,” he said.

Dr Bawumia encouraged NPA to vigorously pursue other plans which would enhance their operations while enhancing its collaborative activities with the National Security Council and the Ghana Revenue Authority in finding a lasting solution to be illicit activities in the petroleum downstream industry.

Dr Mohammed Amin Adam, Deputy Minister of Energy, said the government was committed to ensuring a regular supply of petroleum products to all parts of the country through a cost-effective and efficient distribution system, especially, through the road networks.

He said, despite the flexibility of door-to-door service delivery of petroleum products, there were significant constraints associated with transporting an additional cost with hauling the products, damage to the road infrastructure and increase in road accidents.

Dr Adam said it was therefore important that as a country, there was the need to develop the other modes of transportation such as rail, water and pipelines to be integrated into the distribution system to enhance its effectiveness and efficiency adding that the government was strategically placing Bulk Oil Storage and Transportation Company LTD (BOST) to develop the water transport system as well as the pipeline to convey petroleum product to the northern sector.

He said the Ministry of Energy on its part would ensure a pragmatic review of policies to ensure cost-effective and value addition to the petroleum downstream value chain and also ensure that Ghanaians benefit from opportunities within the industry.

Chibisi Ohakah

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