A report by the Finance Committee of Parliament has revealed that state-owned entities (SOEs) have defaulted in paying some GH¢1.32 billion owed the Ghana National Petroleum Corporation (GNPC) — an act which the committee warns would negatively impact on the company’s operations.
The Committee in its assessment of the 2018 PIAC Semi-Annual Report on the Management of the Petroleum Revenues for the period January to June 2018, stated that the indebtedness which was supposed to have been settled in December 2018, remains unpaid.
The entities involved are the Government of Ghana, Ministry of Finance, Tema Oil Refinery, Ghana National Gas Company and Bulk Oil Storage and Transportation company.
“Per the terms of the agreements, these debts were expected to be paid by the end of December 2018. As of date, the amounts are yet to be paid. This would impact negatively on the operations of GNPC in fulfilling its core mandate.
The committee recommends to the Ministry for Finance to ensure that all SOEs which are indebted to GNPC honour their obligations as per the terms of their agreements to enable GNPC to achieve its mandate,” the report urged.
Background
The committee narrating how the debt came about stated that in 2014, GNPC at the request of the Ministry of Finance and the then Ministry of Energy and Petroleum (MoEP) advanced an amount of US$50 million to the MoF and the Ghana Gas Company (GNGC) for the construction and resurfacing of selected roads in the Western region for the transportation of natural gas liquids (LPG) extracted from Jubilee Gas with the promise of repayment by the MoF.
The road construction was to make it possible for Jubilee Gas to be supplied through GNGC to power plants to help alleviate the power crisis the country was experiencing. As at the end of June 2018, no payment has been received in respect of this advance.
In addition to the US$50 million advance, GNPC has further made payments and guarantees amounting to GH¢1,318,393,339 to the five entities.
