By John Elliot HAGAN, Accra
Minister for Energy John Peter Amewu has disclosed that government spent GH₵232 million providing tax reliefs on petroleum products to ordinary Ghanaians between December 2017 and June 2018.
He says the reliefs are part of government’s efforts to use tax interventions to mitigate the impact of the increasing price of oil on the international market on Ghanaians.
“The revenue loss to government on the removal of the Excise Duty and the reductions of the Price Stabilisation and Recovery Levy (PSRL) alone between December 2017 and June 2018 amounts to over GH₵232 million,” he revealed.
Mr Amewu, who took his turn at the weekly Meet-the-Press Series organised by the Ministry of Information yesterday in Accra, indicated that, “In order to cushion the good people of Ghana from the impacts of increasing world market prices, government has used tax interventions to mitigate the impact of domestic petroleum product price increases.”
He says government removed excise duty on petroleum products and reduced the special petroleum tax rate from 17.5% to 15% in March 2017 and the special petroleum tax rate from 15% to 13% on February 16, 2018.
He further stated that government converted the special petroleum tax from Ad valorem to specific tax on the same date and reduced the Price Stabilisation and Recovery Levy (PSRL) on December 1, 2017.
The Minister also disclosed that government, through the National Petroleum Authority, has been making efforts to ensure that realistic prices are set by Bulk Distribution Companies (BDCs) and Oil Marketing Companies (OMCs).
“The NPA reviews the indicative prices submitted by each BDC and OMC for every pricing window to ensure that realistic prices are set by them and to ensure consumers are not taken advantage of in a deregulated environment,” he explained.
Mr. Amewu explained that since the implementation of price deregulation in 2015, the National Petroleum Authority (NPA) has played a supervisory role by determining the price benchmarks and ensuring that BDCs and OMCs set their prices in accordance with the Prescribed Petroleum Pricing Formula.
44% increase in local content
The Ministry of Energy announced a 44% increase in local content and local participation in Ghana’s upstream petroleum sector.
The Minister of Energy disclosed that as at the end of September 2018, about 600 indigenous Ghanaian companies had registered with the Petroleum Commission, providing goods and services to firms in the oil and gas industry.
According to him, the total value of contracts awarded to indigenous Ghanaian companies and joint ventures over the period amounted to $799 million, representing 44%.
Out of the amount, the Minister explained that a total of $453 million worth of contracts were awarded to indigenous Ghanaian firms whilst joint ventures recorded an amount of $346 million.
Additionally, Aker Energy, he stated, awarded contracts worth $40.3 million to joint ventures companies in accordance with their local contract obligations.
Govt rolls out plans to establish petroleum hub
Mr Amewu says government has rolled out plans to establish a petroleum hub in the western part of the country.
He says the purpose of the hub is to house major infrastructure for refining and processing, discharge, storage, distribution, transportation and trading of petroleum products.
According to the Energy Minister, this development will position the country as a pivot for refined petroleum products in the West African sub-region and the world at large in the medium to long term.
Mr Amewu also indicated that “the establishment of a petroleum hub is one of the government’s strategic anchor initiatives that would serve as a new pillar of growth in the Ghanaian economy.”
The Energy Minister announced that government will soon amend the country’s petroleum laws to deepen the promotion of local content in the industry.
He said the Petroleum Commission has been tasked to work toward amending the Petroleum (Local Content and Local Participation) Regulations 2013 (L.I 2204).
He says the amendment in parliament will make the law more robust to counter and meet current industry challenges, stating that the planned amendments will also deepen the promotion of indigenous Ghanaian participation and in-country spend in the sector.
Mr Amewu also disclosed that government will in 2019 work with other key stakeholders in the petroleum upstream sector to develop a number of other policies for the benefit of the industry.
He indicated that key among the policies is the National Technology Transfer Policy, and Sustainability and Social Inclusion Policy.
Ghana’s energy sector is back to life
Government has successfully revived the dying state of the energy sector.
According to the Energy Minister, his government met the sector in a very deplorable state with alarming high indebted utilities, high electricity tariffs, poor electricity distribution service and low energy penetration.
Mr Amewu stressed that Ghanaians are now enjoying affordable and reliable power due to his government’s relentless efforts in fixing the energy sector.
According to the Minister, his outfit has brought sanity to the power sub-sector, thus ensuring that Ghana is a promised land as far as energy is concerned.
“I am glad to announce that we reviewed several power purchase agreements, saving the country over $700 million every year for 13 years in excess capacity charges. The reviewed and renegotiated renewable energy PPAs resulted in the reduction of tariffs from the average of 19.057 US cent to 12.78 US cents. The renewable energy total capacity also dropped from 2265.1MW to 515.6MW.”
Peter Amewu also said that government has also achieved significant feats in gas commercialisation, stating that “there have been a significant reduction in gas price from US$ 10.5/MMBtu to US$7.89/MMBtu and have also successfully interconnected the gas export pipeline into Ghana’s Atuabo-Takoradi (A-T) to enable the Sankofa gas to be transported through the Natural Gas Transmission System (NGTs) to various customers across the country.”
The Minister also cited government’s effort to ensure fairness, transparency, and predictability in the oil and gas sector of the country.
The Minister also spoke on the safety of Ghanaians, saying that Cabinet has directed a number of actions, including the immediate commencement of the National Liquefied Petroleum Gas (LPG) Promotion Policy based on the Cylinder Re-circulating Model (RCM).
According to him, this is to ensure that at least 50% of Ghanaians have access to safe and environmentally-friendly LPG for domestic, commercial and industrial use by 2030.
Source: The Finder