Ghana National Gas Company’s (GNGC) indebtedness to national oil company, Ghana National Petroleum Commission (GNPC), has increased by $110 million within the first half of 2021.
According to the Public Interest and Accountability Committee (PIAC) in its semi-annual report for 2021, Ghana Gas’ indebtedness to the GNPC as at June 2021, stood at $613,910,025.21.
This is against the $503,802,464.58 recorded at the end of December 2020 and the $334,636,806.27 at end-December 2019.
PIAC in its report attributed the increment in GNGC’s debt principally to the Volta River Authority’s (VRA) inability to meet its debt service obligation to the GNGC.
“As at 30th June, 2021, GNGC’s cumulative indebtedness to GNPC amounted to $613,910,025.21 as compared to $393,042,132.35 in 30th June, 2020. The escalating debt is attributable to VRA’s inability to meet its debt service obligation to GNGC,” said the report.
Total volume of raw gas sales to GNGC by GNPC in the first half of 2021, PIAC notes amounted to 19,868,900.00 MMBtu compared with the 10,920,275.49 MMBtu for the same period in 2020, representing an increase of 81.95 percent.
“On the revenue side, the total indebtedness to GNPC stood at $110.75 million compared to $62.31 million for the same period in 2020,” added the Committee.
GNGC is the nation’s premier mid-stream gas company that owns and operates infrastructure required for the gathering, transporting and marketing of natural gas resources in Ghana.
In a related development, petroleum revenue funding to the Ghana Infrastructure Investment Fund (GIIF) the Committee also noted, has been restored.
According to the Committee, the restoration of funding to GIIF was due to the amendment of the Earmarked Funds Capping Realignment Act, 2017.
“The Earmarked Funds Capping Realignment Act, 2017, which discontinued allocations to GIIF for infrastructural development has been amended to restore petroleum revenue funding to GIIF.
“PIAC notes with commendation the amendment of the Earmarked Funds Capping and Realignment Act, 2017 and the subsequent resumption of allocations to GIIF, remarked PIAC.
According to PIAC, the Ministry of Finance allocated, out of the total Annual Budget Funding Amount (ABFA) of $155.2 million, an amount of $21,723,434.68 million to the Ghana Infrastructure Investment Fund (GIIF) for the Agenda 111 project, leaving a balance of $133.5 (GH¢891,219,215.64) for distribution over four (4) priority areas selected.
Per the Petroleum Revenue Management (Amendment) Act, 2015 (Act 893) and the Ghana Infrastructure Investment Fund Act, 2014 (Act 877), petroleum revenue allocation to the GIIF should be 25 percent of the ABFA.