The Institute of Energy Security (IES), is predicting a shortfall in goverrnment’s revenue from oil exports this year by half due to the continuous drop in global oil prices.
The Executive Director of IES, Paa Kwesi Anamuah Sakyi, told Citi Business News although Ghana exports oil from its three production fields, the volumes are relatively lower compared to other oil-producing and exporting countries.
A price war between Saudi Arabia and Russia has caused oil prices to drop to about US$28 per barrel as at Monday dawn, the lowest in four years. Currently, oil revenue accounts for about seven percent of the government’s total revenue.
Mr. Anamuah Sakyi also said the reduced production by Tullow Oil, will combine with the decline in global oil prices to dwindle the government’s revenue.
“What this means is that the government’s projected revenue which was around US$58.66 per barrel – if price of oil stays around the region of US$30 per barrel to the end of the year, then there will be a squeeze in the revenue of the government. The government expected to get some petroleum revenue of about US$1.2 billion for this year. If price stays around the same, then the government should expect to get about half of this revenue.”
“Already we have seen Tullow cut back on production. Aside from the international fall in crude oil prices that we have to deal with in selling our bit of the oil, production is also falling in our shores”.
Mr. Anamuah Sakyi added that calls for local oil marketing companies to reduce their prices at the pumps are justified.
“In fact, if these petroleum service providers will be fair to all of us, anything below 10 percent will not be fair. As we speak prices are dropping and it is expected that they will drop even further because Russia and Saudi are not done yet.”
Shale technology is also going to suffer in one way or the other because the major producers will want to flood the market to kill American production. Will the Americans back down or will also want to flood the market further.
As these geopolitical wars continue, the only thing the Ghanaian currently expects is that these numbers will reflect if they don’t reflect I’m sure that some actions will include court actions will follow,” he stated.