Illegal activities in the petroleum sector cost Ghana US$200m yearly

Government of Ghana launches a strategic system to prevent illicit fuel diversion, here’s how
  • In times past, transport service providers in the oil sector have allegedly exploited the inability of the NPA to confirm delivery of petroleum products to retails outlets.
  • This has led to the loss of revenue from the oil sector
  • Ghana lost over US$200 million yearly in the form of lost direct petroleum tax revenue, subsidies that do not get to the targeted.

Ghana’s Vice President, Dr Mahamudu Bawumia, has lamented about the high revenue loss in the petroleum sector due to illegal activities.

Unveiling the cargo tracking system, Dr Bawumia said he is concerned that “Illicit activities are estimated to cost the country over US$200 million per annum in the form of lost direct petroleum tax revenue, subsidies that do not get to the targeted constituencies and abuse in transport claims for transportation of petroleum products among others.”

To address some of the challenges, the National Petroleum Authority (NPA) has set up the Electronic Cargo Tracking System (ECTS) and a National Command Centre.

The centre is to be run by the National Petroleum Authority in collaboration with other key stakeholders in the petroleum downstream sector.

Dr Bawumia said the operationalisation of the Centre, which would track the movement of all petroleum products in real-time, would have several benefits, key among which is reduced revenue losses and greater efficiency in the control and distribution of petroleum products.

“As we all know, energy is critical to everything we do, from home to office and industry, and how countries manage their energy sector along the supply chain has become a very important issue around the globe. The government, therefore, places high priority on the development of all sources of energy and their distribution to ensure the availability of cheap, yet quality energy for the good people of Ghana.”

Dr Bawumia said the losses recorded in the sector could be used to finance a portion of the government ‘s Free Senior High School (SHS) programme.

On his part, Executive Officer of the NPA said “the estimated revenue loss in 2014 was then about GH¢43 million. This situation threatened the sustainability of the Fund.”

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