Government accrued a little over 3.29 billion cedis in 2016 from energy sector levies, a report, presented to Parliament by the Finance Minister Mr Ken Ofori Atta has revealed.
The Annual report on the management of the energy sector levies and accounts for 2016, also revealed that total amount of GH¢3,256.29 million was programmed to be collected as Energy Sector Levies (ESL) in 2016, however the actual collections made at the end of the year amounted to GH¢3,298.94 million.
This figure was GH¢42.64 million (1.31 percent) higher than programmed.
The higher than programmed outturn was largely as a result of the balance brought forward (bbf) of an amount of GH¢83.27 million from the Petroleum Debt Recovery Levy Account (PDRA) into the EDSA, the report indicated.
However according to the report despite the increase in collections, actual lodgment of cash for some of the levies were lower than what was received.
The report stated that of the total actual collections, an amount of GH¢2,672.69 million was lodged into
the Petroleum Collection and the Energy Debt Recovery Levy Accounts at the Bank of Ghana.
However, total lodgment was lower than actual collections by GH¢626.24 million, (18.98 percent).
The development occurred because GH¢224.37 million was not lodged by the GRA. The amount includes 9 percent retention of Road and Energy Fund Levy collections as well as amounts in transit.
Also GH¢145.52 million of Public Lighting Levy (PLL) collections was retained by the ECG and VRA.
The amount is GH¢44.49 million (26.42 percent) higher than the established retention of 60.0 percent.
Another GH¢244.14 million of NESL collections was retained by the ECG and VRA.
The amount is GH¢133.39 million (48.18 percent) higher than the established retention/transfer into the National Electrification Fund of 40.0 percent.
Meanwhile GH¢12.21 million of PSRL collections were not lodged, these according to the report were mainly cash in transit and returned/dishonoured cheques which are currently being reconciled.
Utilization of revenue
According to the report between January and December 2016 a total amount of GH¢311.05 million was utilized from the Energy Debt Service Account of which GH¢187.05 million was paid for the recovery of outstanding TOR debt.
Payments were mainly in respect of transfers to various creditor banks for outstanding debts owed by TOR.
GH¢124.0 million was also paid for foreign exchange under-recoveries. The payment was part of an outstanding amount of GH¢655.55 million audited claims of the Bulk Oil Distribution Companies (BDCs).
GH¢787.03 million was also utilized for the payment of power utility debts. The amount includes transfer charges of GH¢9.57 million.
Others included GH¢189.39 million for the supply of strategic oil stocks to the Bulk Oil Storage
and Transportation Limited (BOST), GH¢79.6 million payment for the supply of gas to VRA, GH¢43.83 million for the supply of premix fuel, GH¢0.47 million for transfer charges.
Despite these figure, It s still unclear how much revenue was accrued in previous years and how they were utilized.
Recent hikes in the prices of petroleum products led to agitations from the public over how much has been accrued so far from the levies and how it was utilized.
Breakdown of levies
The levies 6 in number -Energy Debt Recovery Levy (EDRL), Price Stabilization Levy and Recovery Levy, Public Lighting Levy (PLL), National Electrification Scheme Levy (NESL), Road Fund Levy and Energy Fund Levy were enacted under the Energy Sector Levies Act, 2015 after levies introduced prior, were not managed properly among others.
Cash from the levies are accrued from the sale of petrol, diesel, marine gas oil, residual fuel oil, liquefied petroleum gas, kerosene, and electricity.
Revenue accrued from the levies are to be used for the clearance of the legacy debts of Energy Sector SOEs, power generation and support for power sector infrastructure, subsidy for premix fuel, and the stabilization of petroleum prices.
Energy sector challenges
The energy sector has been saddled with a debt of 2.6 billion dollars, which has been attributed to poor management and financial challenges by State Owned Energy Enterprises.
Government has announced plans to issue a 15 year bond this month, September 2017, to settle all outstanding debts in the energy sector.
The bond will be serviced with revenue from the energy sector levies.
Documents cited by Citi Business News as at 31st December, 2016 stated that government’s net debt in the Energy sector was 2.3 billion dollars.
A breakdown indicated that net debt to banks and fuel suppliers amounted to 1.3 billion dollars.
A further breakdown also showed that the banks are owed 782 million dollars, while fuel suppliers are owed 440 million dollars.
State owned power producer, the Volta River Authority (VRA) owed the banks to the tune of 782 million dollars.
VRA also contributed 278 million dollars to the 440 million dollars owed fuel suppliers, while TOR contributed 162 million dollars.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana