Public Interest Accountability Committee
US$2.1M SURFACE RENTAL OIL REVENUE STILL IN ARREARS – PIAC
News Date : 3rd June 2021

The Public Interest and Accountability Committee (PIAC) has indicated that surface rental payments to the state remain in arrears to the tune of US$2.1million for the year ending 2020.

According to the Committee in its statutory annual report, 2020, it identified that the US$1.6million surface rental arrears recorded in 2019 has further increased by 34.7 percent to US$2.1million in 2020; a trend that is worrying and should be given the necessary attention.

PIAC is therefore calling on the Ghana Revenue Authority (GRA) to as a matter of urgency initiate action to recover surface rental arrears with the appropriate interest, as provided for in the Petroleum Revenue Management Act (PRMA). PIAC emphasised that the continuous default in payment of this income stream denies the Petroleum Holding Fund (PHF) necessary funds needed for development projects.

Chairperson of the Public Affairs and Communication Sub-Committee, PIAC, Eric Keyman Defor, stressed that surface rental – which is an obligation on operators of various oil blocks to pay to the state – had been consistently running into arrears due to failure on the part of some operators to pay within the specific time-frame mandated by the laws.

“The Ghana Revenue Authority (GRA) is the institution mandated to collect such revenues, and it has been realised that some institutions voluntarily pay while others don’t; and so the GRA must pursue them to retrieve those monies.

“In business, there are challenges from time to time; and so it may be possible that some of these companies are having financial challenges and that is why they are not paying on time. But if we do not mount pressure on them, they may end up not paying and eventually move out of the field and recovery becomes difficult; so the GRA must act now,” he said.

However, he reiterated that the fact it is a recurring situation – and particularly in the 2020 report, even increasing by over 34 percent – makes it more worrying to PIAC, and the GRA must consider implementing sanctions against defaulters.

The Public Interest and Accountability Committee (PIAC), which was created as the unique institution with additional oversight responsibility to support the work of Parliament in ensuring the prudent management and use of petroleum revenues, was also limited in its work as a result of the COVID-19 pandemic.

Despite these challenges, the Committee carried out most of its planned activities in the spirit of ensuring accountability and transparency in the management and use of petroleum revenues, in fulfilment of its three-fold mandate under Section 52 of the PRMA.

Source : Business and Financial Times