Ghana loses $200m yearly from petroleum smuggling – NPA boss

Ghana loses about $200 million of tax revenue due to the smuggling of petroleum products and other nefarious activities in the petroleum sector every year.

Chief Executive of the National Petroleum Authority (NPA) Mr Alhassan Tampuli said those activities also cause the country to lose about $12 million from the unified petroleum price fund annually.

Describing the activities as lucrative, Mr Tampuli mentioned Takoradi port, Tema main Port, Prampram, Aflao and the eastern coastline as the unapproved offshore routes used for the smuggling.

“These nefarious activities of the petroleum service providers and some that are not even service providers, led to the country losing colossal $200 million per annum of tax revenue,” he said.

He indicated that some elements in the petroleum industry had made it their business to engage in despicable activities “which eventually leaves the country poorer.”

Mr Tampuli expressed concerns about the smuggling of subsidised products such as premix, marine gas and gasoline, as well as what he termed fraudulent freight claims from some transporters and siphoning of LPG from bulk vehicles into surface tanks.

He was speaking at the opening of the Ghana International Petroleum Conference (GhipCon) 2019 on the theme “Regional Collaboration: A Catalyst for Transformation”

GhipCon is Ghana’s foremost Petroleum Downstream Conference organised under the auspices of the Ministry of Energy and the National Petroleum Authority in partnership with the Ghana Chamber of Bulk Oil Distributors and the Association of Oil Marketing Companies.

The three-day conference is designed to actively bring to the fore the operating industry’s perspective and guidance on issues of governmental and regulatory policy as well as best practices for the advancement of the industry, not only Ghana but across the West African sub-region and beyond.

Mr Tampuli also revealed poor quality products from some neighbouring countries are smuggled by road through unapproved entry points between Ghana and Togo and eventually end up at private tank yards, mining companies and other retail outlets.

Additionally, he said some players have been dumping gas oil declared for sale to foreign vessels at local filling stations while some of them have been engaging in under-declaration and non-declaration of products lifted at various depots.

“Over 300,000 metric tonnes of actual annual consumption was unreported last year, he said.

On the back of these, he said the GNPC in collaboration with the Ghana Revenue Authority, the Ghana Navy and the security agencies rolled out measures to tackle the problem head-on to save the nation from the loses.

“I believe it is time for petroleum players in the sub-region to engage in a dialogue and the issues that confront us and find common unique solutions for the advancement of our respective countries.

Digitizing distribution of premix fuel

Vice President Dr Bawumia, speaking at the conference, revealed that the digitisation agenda of President Nana Akufo-Addo will soon extend to the distribution of premix fuel in Ghana in order to increase efficiency of its delivery to fishermen.

He was of the view that introducing digital technologies in premix distribution will ensure that fisherfolk, for whom the product is subsidised and provided for, actually get it.

“We have to increasingly leverage on the digital technologies that are available to increase efficiency in the downstream petroleum sector. One of the areas that we have been discussing and have taken a decision on is for example the distribution of premix fuel in Ghana amongst the fishermen,” Vice President Bawumia disclosed.

Commencement of first phase of new pipeline infrastructure

Dr Mahamudu Bawumia also has announced plans by government to commence the first phase of a new pipeline infrastructure project that will ease the movement of petroleum products across the sub-region.

For this to be accomplished, the Vice President said government is working on a petroleum transportation infrastructure master plan that will enhance the pace of infrastructure sourcing and further play a key role in the African Continental Free Trade Agreement.

Dr. Bawumia said there will be easy flow and movement of petroleum products from Tema to Akosombo to Buipe and other towns after the establishment of the project.

According to him, not only will the petroleum transportation infrastructure project ease the movement of petroleum products across the country, it will also link Ghana to the sub-regional market thereby deepening the regional integration agenda of the Akufo-Addo-led government to fulfil the objectives of the African Continental Free trade Agreement.

Dr. Bawumia further indicated that the project will “facilitate the development of alternative transportation infrastructure for petroleum products such as railway lines, pipelines and river badges to major demand centres across the country”.

Moreover, he revealed that the project will soon be presented to cabinet as the ministerial committee working on the master plan has finalised its work.

The Vice President Dr Mahamudu Bawumia who was the guest speaker at the function, noted that government is working on gas law to regulate industry, stressing that the delicate nature of the gas industry in the country makes it one that must be highly regulated.

He said government will soon complete work on the transformation of the existing gas master plan into a gas law which will be used to regulate the Industry.

The new law is expected to provide the enabling environment for investors as well as help government to implement new technologies for the gas sector.

The Vice President indicated that government recognizes that there are some regulatory challenges that must be addressed to provide regulatory certainty and predictability in the downstream natural gas market.

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