Public Interest Accountability Committee
COMPANY’S INDEBTEDNESS TO GHANA GAS COMPANY HIT NEARLY US$1BN – PIAC
News Date : 26th November 2020

The Public Interest and Accountability Committee (PIAC) has revealed that the cumulative indebtedness to the Ghana National Gas Company Limited (GNGC) has continued to increase to US$942,260,510.63.

According to PIAC, this is as a result of the failure of GNGC’s customers to honour their obligations.

PIAC, the body established by the Petroleum Revenue Management Act (PRMA) 2011, (ACT 815) to supervise the utilization of petroleum revenue, said in a statement on Thursday November 26 that the GNPC spent only nine (9) percent of its total receipts on Jubilee equity financing.

This is as a result of the re-phasing of work programmes, as well as disputes surrounding the Cash Calls submitted by the Operator, PIAC said.

The disputes are currently under negotiations between GNPC and the Contractor Party, it added.

“Cumulative raw gas production increased significantly by 65 percent; the highest recorded half-year volume of gas produced since 2010.Total petroleum receipts in the Petroleum Holding Fund (PHF) for the period stood at US$322,571,265.64, indicating a decline of 11.32 percent.

“The Ghana National Gas Company (GNGC) received US$1.78 million under the Cash Waterfall Mechanism in order to address their indebtedness to the Ghana National Petroleum Corporation (GNPC) for gas supplied.

“However, there was no payment to GNPC. Consistently, the non-payment of gas revenue denies the PHF of its due entitlement.

The Ghana Petroleum Fund reserves recorded a 24.09 percent reduction at the end of the period compared with the same period for 2019.

“This is as a result of the lowered cap and subsequent withdrawals from the Ghana Stabilisation Fund (GSF). Consequently, the GSF yield reduced by 68.08 percent from that of the same period of 2019.

“For the fourth time, the Ministry of Finance has failed to provide data on ABFA utilization for PIAC’s analysis and reporting. This practice makes it difficult to reconcile disbursements and expenditure, and ultimately undermines the spirit of accountability as envisaged in the PRMA.”

PIAC recommended that the “GNGC and GNPC should agree on a payment plan over the receipts from the Cash Waterfall Mechanism. This would ensure that GNPC receives payment for raw gas supplied, and makes appropriate lodgments into the PHF. Parliament should play a critical role in this arrangement.

“PIAC call on Parliament to strengthen its oversight mandate on the Ministry of Finance. This is because the Ministry’s persistent failure (fourth time) to provide half-year data on ABFA utilisation is not only adversely affecting the work of the Committee, but also eroding gains in the fight for transparency and accountability in the management and use of Ghana’s petroleum revenues for the benefit of citizens.”

Source : 3News.com