The Public Relations Officer of the National Petroleum Authority (NPA), Yaro Kasambata says the authority has cleared about half of the GH¢412 million indebtedness to importers of petroleum products in the country.
He explained that this was made possible through savings made from declining crude oil prices on the international market.
However, the NPA has maintained that it cannot review petroleum prices downwards until it is able to clear all debts owed the Bulk Oil Distributors (BDCs).
Mr Kasambata told an Accra based radio station: “I do not want to say that it is not on the table. I do not want to say it is on the table. When we go for our review meetings, all scenarios are possible”. As at today, prices of oil went below $60 per a barrel but Ghanaians are yet to benefit from the plummeting prices of oil.
Government has been under to pressure to review the prices downwards to reflect the situation on the world market. Petrol currently sells at about Ghȼ17 per gallon, a price the public considers outrageous.
But the NPA in a statement issued Sunday said it even though it acknowledges the fact that the oil prices have dropped significantly, it cannot readily sell the products below the current prices.
“The National Petroleum Authority (NPA) acknowledges the fact that fuel and crude oil prices on the world market have decreased in the last few months warranting a decrease in the ex-pump price.
“However, the NPA was unable to immediately respond to the drop in world market prices because of the huge outstanding debt (under-recoveries) owed the Bulk Oil Distribution Companies (BDCs) to a whopping tune of GHC412million as July 31st 2014 which the NPA has been paying on a fortnight basis through the over-recoveries (windfall) that has accrued totalling GHC200million which has been paid to the BDCs”.
The NPA after its review meeting will take the decision whether to reduce the prices of the products or maintain it at the current level.
Although consumers, civil society organisations and the political parties have called on the NPA to reduce the prices at the pumps, it insists that it is using the price differentials to defray debt owed the Bulk Oil Distribution companies (BDCs) in the country.
Information picked by African Eye News.com indicate that the BDCs are being owed by the government to the tune of GHc175 million, as subsidy on refined products.
Also, they are asking government to pay about GH¢1.3billion in respect of forex exchange losses.
Parliament, in November this year, passed a special petroleum tax with the assurance that monies accrued from the over recovery on fuel will be paid to BDCs which import refined fuel.
The CEO of the BDCs’ Chamber, Senyo Hosi, indicated that government was yet to pay them any money.
“We have not received funds directly from Government. The only funds we have received so far have been over recoveries.
“When we sell, the excess funds [accrued]; we’ve retained them to pay down a part of Government’s debt. “We are still hoping the government will intervene,” he explained to Joy FM, an Accra-based radio station.
He also indicated that the government was yet to make payment from the proceeds of the new petroleum tax imposed late last month.
Members of the BDCs’ chamber are due to meet with the Minister of Finance to come with modalities on how the tax would help in defraying the huge debt, according to Mr. Hosi.
EFFECTS OF OIL PRICES FALL ON ECONOMY
The Minister of Finance, Seth Terkper noted: “Ghana has had to endure the harsh economic impact of the recent declines in commodity prices. In particular, the declining price of gold has had adverse effects on jobs and revenues in the mining sector.
The projected decline in oil prices would also impact negatively on the fiscal framework through lower revenues from oil exports whilst at the same time dampening the effect of foreign exchange pressures arising out of oil lower import bill”.
While crude oil exports was estimated at US$2,925.7 million, down by 1.7 percent, compared with the level recorded in the corresponding period in 2013.
The marginal decrease in value was due to a decrease in volume exported from 27.6 million barrels in 2013 to 27.3 million barrels in 2014. Also, the average realised price of crude oil decreased by 0.6 percent to settle at US$107.3 per barrel, according to Mr Terkper.
He however assured Ghanaians in his 2015 Budget that as commodity prices decline further, government would take necessary steps to mitigate potential impacts.
Explaining: “To sustain our medium term growth prospects, measures are being put in place to reduce our vulnerability to external shocks through such means as strengthening our tools for risk management, diversifying and adding value to our exports, and supporting local production of imported goods which can be produced domestically.
The fiscal frameworks would also be strengthened to foster medium-term planning and preserve debt sustainability, as well as deepen structural transformation of the economy”.
African Eye News.com
