Ghana loses GHC1bn through 'unscrupulous' petroleum service providers

The Chief Executive Officer (CEO) of the National Petroleum Authority (NPA) Mr. Hassan Tampuli has disclosed that the country lost almost one billion cedis in tax revenue in 2017, due to the activities of some unscrupulous petroleum service providers in the system.

He explained that what these unscrupulous service providers did was dumping export declared products and Marine Gas Oil (MGO) which is foreign declared to be sold to foreign vessels for economic gain and tax avoidance.

“MGO leakages are estimated to have cost the nation GHS18million in lost tax revenue in 2017, while export dumping cost over GHS850million,” Mr. Hassan Tampuli revealed.

Delivering a welcome address at the maiden Downstream Colloquium organized by the NPA under the theme: “The Petroleum Downstream; Then, Now and the Future”, Mr. Tampuli said: “The Ministries of Energy and Finance in collaboration with the NPA have put in place stringent measures which have drastically reduced these leakages; the measures include application of domestic taxes on MGO Foreign sold to foreign vessels and collaboration with sub-regional neighbors to help account for products declared as exports to those countries.”

“All these measures are aimed at removing the economic incentive to cheat the system and are seen to be yielding some results. MGO foreign for instance has reduced from 20millionlitres a month to 290,000litres a month based on the Authority’s preliminary estimates. We have thought it important to include the issue of these leakages on the agenda for discussion today,” he explained.

Moving forward in 2018, Mr. Tampuli indicated that the Authority intends to intensify activities towards plugging the supply leakages, stressing that “Our activities will be geared towards assisting Ghana Revenue Authority (GRA) to achieve the Special Petroleum Tax (SPT) revenue target of GHS 1.8 billion and Ministry of Finance achieve the Energy Sector Levies Act (ESLA) revenue target of GHS 3.7 billion as provided for in the 2018 budget.

No more toxic fuel

Touching on fuel quality in the country, Mr. Tampuli noted that Ghana is one of the very few African countries such as Tanzania, Uganda, Kenya and Morocco to be consuming low Sulphur fuels with typical imports at less than 10ppm.

“No more toxic fuel,” he said.

According to him, “Technology-based schemes and projects such as the Petroleum Products Marking Scheme and the Bulk Road Vehicle Tracking project, have helped us efficiently monitor and ensure the integrity of the quality and quantity of petroleum products delivered to consumers.”

Cylinder Recirculation model of LPG distribution

Mr. Tampuli said his outfit is working towards delivering Liquefied Petroleum Gas (LPG) to consumers in a safer and more efficient manner using the Cylinder Recirculation model of LPG distribution.

“The relevant licenses will be issued and safety protocols will be keenly observed to ensure the safety of the good people of Ghana while increasing access to LPG for domestic, commercial and industrial use from the current 25% level to 50%,” he said.

Mr. Tampuli disclosed that out of the total of 657 stations which were assessed during the first phase of its LPG refilling plant safety risk assessment 59 were closed down due to non-compliant.

He said the second phase will be rolled out this year explaining that this phase will lead to decommissioning of high-risk stations and their subsequent conversion into cylinder distribution centers under the new LPG policy.

“Currently a total of 657 stations have been inspected using the criteria developed for the first phase of which 59 remain closed down due to non-compliance. The next phase will be the categorization of the stations into high and low risk.
The exercise will take into consideration the location and human density around the stations, among others.

“The NPA Act will be amended to give it enough legal backing to deal with the new wave of industry issues,” he added.