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PIAC demands swift clearance of $ 2.4bn energy sector debts

  • POSTED ON: June 16, 2017
  • SOURCE: Citi Business
  • CATEGORY:

The Public Interest and Accountability Committee (PIAC) has warned that the troubles confronting Ghana’s energy sector may deepen soon if the huge debts in the sector are not settled.

PIAC argues that the debt owed particularly by the Volta River Authority (VRA), greatly affected operations for 2016 considering the declining global oil prices.

In the Committee’s 2016 annual report, it has advocated strongly that the government and relevant stakeholders find an immediate solution to the issue.

One of threats the accumulated debt is posing to the energy sector is the emergence of potential competition for lean gas.

By this, PIAC argues that the Ghana Gas Company is compelled to sell off gas to other entities other than the VRA due to the indebtedness of the state owned company.

The Vice Chairman of PIAC, Mr. Kwame Jantuah believes the development is worrying as it could rip Ghana’s power plants off the needed gas if unchecked.

“With the challenge that the GNGC has with regards to the amount of money owed them, they need to make money somehow and by so doing they are piping gas to other companies which also need gas to do their work…it can be worrying but what does the GNGC do? Definitely they may have to find their own ways and means to generate income to be able to pay their own staff,” he remarked.

VRA’s indebtedness alarming

According to PIAC’s 2016 Annual report, the VRA’s debt to the Ghana Gas Company has amounted to about 454 million dollars.

The Ghana Gas in return owes the Ghana National Petroleum Corporation (GNPC), 135 million dollars.

A development, Mr. Kwame Jantuah describes as alarming and wants the government to be swift with measures such as the issue of the 15 year energy sector bond.

“The debt cannot go on; we need to solve it once and for all for us to be able to go forward because everyday cost of production is going up and so we need to be able to clear this debt as quickly as possible,” he asserted.

PIAC is also concerned with the delay in the evacuation of raw gas from the TEN fields.

The Committee could not comprehend the decision by the operators to flare about 71% of the gas produced on the TEN oilfields where there is high demand on shore.

Recommendations

PIAC is therefore recommending an immediate meeting between the government, GNPC and Ghana National Gas Company to agree on a clear roadmap for the clearing of VRA indebtedness.

Also, that the Ghana Revenue Authority ensures that auditing of tax returns filed by Jubilee Partners are carried out expeditiously so that any additional assessment payable is paid on time.

2016 oil revenue drops

In 2016, there was a 13.7% decline in crude oil production compared to 2015.

The figure dropped from about 37 to 32 million barrels between 2015 and 2016.

Source:  http://citibusinessnews.com/index.php/2017/06/16/piac-demands-swift-clearance-of-2-4bn-energy-sector-debts/

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