File photo
Institute for Energy Security (IES) has forecasted that Ghana might lose out on its projected oil revenue generation following the recent drop of crude oil prices on the international market that plummeted around 30 percent.
Earlier, Finance Minister, Ken Ofori-Atta in his 2020 Budget statement projected Ghana’s oil revenue at US$8.9 billion from about 13 percent of total revenue and grants.
According to Paa Kwasi Anamua Sakyi, Executive Director of the IES, government will not pass on the windfall to consumers but rather expropriate that for revenue mobilization purposes especially following the coronavirus which has erupted China and the global economy which is expected to negatively impact on oil prices and revenue.
“Government’s projected revenue was around US$58.66 per barrel and what it means is that if the prices of oil stay around the region of US$30 per barrel till the end of the year, then there’ll be a squeeze in the revenue of the government. Government expected to get some petroleum receipt of about US$1.2 billion for this year.”
“But if prices should stay around the US$30 mark, then the government is less likely to get half of the revenue that it projected. Already, we’ve seen Tullow cut back it’s production. So aside the international fall in crude oil price that we have to match with in selling our own bit of oil that we get as a country, production is also falling in our own shores,” he said.
“Ghana risks losing out on two fronts particularly; one from the fall in projected oil revenue and also the possibility of much lower fuel prices at the pumps across the country. The most important thing is that, this is going to impact on us negatively,” he stated.
“The prices will still remain the same so and I’m not sure that we will see a fuel price reduction at the pumps anytime soon and in the worst-case scenario, it’s going to stay the same or we’d see a marginal reduction but not a substantial one to match with the international fall in price of crude and fuel prices,” he added.
Anamua Sakyi cautioned that should the price of crude oil remain the same on global markets, this could lead to job losses on the global scale as companies risk going bankrupt and economies of oil-exporting countries will tumble.
