Failure of the Volta River Authority(VRA) to pay some $500 million it owes the Ghana Gas Company is said to be having a toll on the production of gas in the country.
The debt which has been lingering on for some years now, accumulated as a result of the supply of lean gas for power generation by the Gas Company.
As at May 2017, the VRA had paid only 30% of the total debt it owes Ghana Gas Company, leaving a substantive amount still unpaid.
Speaking to Citi Business News on the sidelines of the Ghana International Petroleum Conference (GhIPCON) organized as part of the Citi Business Festival, Chief Executive of the Ghana National Gas Company, Dr. Ben Asante explained that the legacy debt in the energy sector is having a negative impact on their operations.
“The challenge is that we supply to customers and they don’t pay us. Our brothers and sisters at VRA owe us a chunk of this money, he lamented.”
Mr. Asante is however hopeful that the VRA will defray the debt in the coming days as talks are underway between the two companies on how to solve the problem.
Meanwhile, a 2015 report by the World Bank indicates that corruption, unnecessary taxes as well as the duplication of roles of agencies regulating the gas industry contributed to the low investor confidence in the gas industry.
Mr. Asante believes this can be corrected if the roles of agencies managing the sector are streamlined.
He explained that “the situation is not the best. We have taken some of the best steps to get clarity in terms of who does what in the gas value chain. Right from who is doing aggregation, who is doing shipping, who is doing transportation and processing and who is doing the sales’ part should all be streamlined.”
The second Ghana International Petroleum Conference(GhIPCON) brought together hundreds of industry players in the Oil and Gas downstream sector including Oil Marketing Companies and Bulk Oil Distribution Companies among other stakeholders.
The three day event organized by the Chamber of Bulk Oil Companies is also one of the lined up events for the 2018 Citi Business Festival.
By: Nana Oye Ankrah/citibusinessnews.com/Ghana