'Government violating Petroleum Act'

The Centre for Public Interest Law (CEPIL) on Friday pointed out that government is violating certain aspects of the Petroleum Revenue Management Act, especially with regards to the 2013 budget.

Mr Mohammed Amin Adams, Consultant to CEPIL who presented findings of a report to that effect said the 2013 budget did not capture the capital gains tax as one of the revenue streams from the 500 million- dollar Sabre Oil and Gas acquisition by PetroSA.


He said capital gains tax is a kind of income tax collected when one company sells for instance its assets higher than it was bought or acquired. Mr Amin Adams said Ghana could gain about 50 million dollars if it had captured the capital gains tax in the 2013 budget.


He said the revenue generated from oil production was managed under the Petroleum Revenue Management Act 2011 (Act 815), which provided a framework for revenue inflows and outflows.


The law, he said, also established the Public Interest and Accountability Committee, which had mandate to exercise independent oversight over the management of petroleum revenues. He noted that the Committee had already issued two important reports, which highlighted violations of the law.


"Government has taken some actions to address these reported violations but this is no guarantee that further violations of the law may not occur," he added. Mr Amin Adams who is also the Chief Executive of the African Centre for Energy Policy said the determination of a Benchmark Revenue had not been certified by an independent certifier as the law required.

He therefore urged Government to as a matter of urgency to appoint an independent certifier to certify the expected revenue for the 2014 fiscal year or else civil society organisations should pursue a legal redress to compel government to seek independent certification of the Benchmark Revenue.


He also called on government to regularise its plan to use part of the Annual Budget funding to create an Infrastructure Fund by seeking an amendment to the Petroleum Revenue Management Act.


Commenting on funding of the Ghana Gas Company, Mr Amin Adams said the only statutory allocation allowed under the law for oil and gas infrastructure financing is the allocation to the Ghana National Petroleum Company.


However there has been consistent allocation of petroleum revenues to the Ghana National Gas Company in the name of expenditure which also constitute a violation of the law.


Mr Baluri Bukari, Finance Director of Ghana Gas Company, however, explained that corporate entity could not operate a gas processing plant without capitalisation. He said the company had received a total of GH¢40 million even though the project was estimated to cost GH¢100 million.

Mr Bukari also pointed out that views that Ghana Gas Company received GH¢ 100 million in 2012 and was expected to receive another unspecified sum in 2013 was not right. He therefore called for a regular source of funding for the company to enable it achieves its mandate since the project would generate revenue for the country.


Mr Eric Asumang, Economic Officer at the Ministry of Finance said government had set up a team to review the petroleum law and would welcome inputs from the public to ensure that Ghanaians benefit from the oil and gas exploration.


Mr Augustine Niber, Executive Director of CEPIL, said the Petroleum Revenue Management Act defined the framework for managing petroleum revenues since it paved the way for the spending of the oil incomes that would be accruing to the state.


He said CEPIL with support from STAR-Ghana, a multi-donor pooled organisation is implementing a project titled: “Ensuring and Enhancing Compliance with Oil and Gas Laws and Policies and Protecting the Rights of Oil and Gas Communities.".