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Parliament’s Finance Committee has raised red flags over the debt accumulation of the Ghana Gas Company (GNGC) cautioning that the company stands the chance of being liquidated should the situation remain unaddressed.
According to the Committee, the indebtedness of the Volta River Authority (VRA to the GNGC is adversely affecting the company in meeting its obligations including those to the Ghana National Petroleum Corporation (GNPC).
The Committee, in its report on the report of the Public Interests and Accountability Committee (PIAC) on the management of petroleum revenues, said, another “legacy debt” was emerging in the energy sector after the issuance of an energy bond last month to address the debts.
It would be recalled that the Ghanaian Times on Monday August 7, 2017 reported that the GNGC was
suffocating under a US$534 million debt owed it by the VRA for liquefied petroleum gas supplied to it between May 2015 and May 2017.
Moving the motion for the approval of the report, Chairman of the Finance Committee and the honorable Member of Parliament (MP) for the New Juaben constituency, Dr. Mark Assibey-Yeboah, said “VRA’s failure to pay for the supply of lean gas during the period impacted negatively on the operations of the GNGC.”
Dr. Assibey-Yeboah said the indebtedness had left the company with no option than to resort to other ways of raising the needed funds including selling lean gas to other entities to fund its operations.
He expressed concern over the delay with which the Ghana Revenue Authority (GRA) conducts tax assessment of the various oil companies, urging the Finance Minister, Ken Ofori Atta, to ensure the authority conducts relevant tax assessment on all oil companies to ensure compliance.
The Ranking Member on the Committee, Cassiel Ato Baah Forson, MP, Ejumako/Enyan/Essiam, challenged the VRA to manage its finances well to fulfil its financial obligations to Ghana Gas to avert any shutdown.
He said the VRA has not made any payment to Ghana Gas for the commodity it has lifted this year which amounted to over US$300 million.
The report, among other findings said 2016 recorded the worse performance as it slumped by negative 49 per cent which translates into more than 5 million barrels of crude.
It said at the time crude oil price was at its lowest ebb robbing the country of revenue.
In this regard, the Okaikoi North MP, Fuseini Issah, wants the government to venture into hedging, a trade he admitted was risky adding other oil producing countries which hedged sold at US$73 as compared to Ghana’s US$43.
But a former Deputy Energy Minister, John Jinapor, MP, Yapei/Kusawgu, said hedging may not be the
solution with the price slump since it is periodical.