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Despite the fact that Ghana is a net exporter of oil, total receipts are not the entire export earnings. Government's interventions have helped put petrol and diesel at a selling price of GHp 5.12 per liter instead of GHp 5.54 and GHp 5.50 respectively which would have resulted in a 13 per cent increment in petrol prices and 12 per cent in diesel prices. Petrol he said, is thus 9 per cent less expensive than it should have been.
This revelation was made by the Minister of Energy, Honourable Peter Amewu at the Ministry in Accra on Thursday 20th September 2018.
The Minister addressed happenings in the Energy sector, relating to stable power supply, power purchase agreements, electricity tariff reduction, emergency power plants, petroleum product prices and so on.
Honourable Amewu said that the issue of the current petroleum price hike in Ghana is as a result of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC agreements to cut global production to drive prices up and the decision by the United States of America to reinstate economic sanctions against Iran which has affected the international market. He added that the current government has used tax interventions to mitigate the impact of domestic petroleum product price increases.
The tax interventions put in place by government since March 2017 through to August 2018 include the removal of excise duties, reduction of the Special Petroleum Tax from 17.7 per cent to 13 per cent on February 16th 2018 and the reduction of Price Stabilisation and Recovery Levies from GHp12/Litre to zero for petrol, GHp10/liter to zero for diesel and GHp10/Kg to GHp13 Kg for LPG.
He said that a committee has been set up by the Energy Commission to review all the Power Purchase Agreements signed by the Electricity Company of Ghana in the previous government for conventional thermal power projects. The review noted an excess in the required additions inclusive of a 20 per cent reserve margin from 2018 to 2030 and would result in the payment of capacity charges for the discharged plants.
They recommended that 8 of the PPAs with a combined capacity of 2070MW proceed without modification, 4 with a combined capacity of 1,810MW be deferred to the period 2018-2025, 3 PPAs with a combined capacity of 1,150 MW be deferred beyond 2025 and 11 PPAs with a combined capacity of 2,808MW be terminated. This termination and deferment will provide significant savings for government.
The Public Utilities Regulatory Commission (PURC) also reduced tariffs in March 2018 forthe Industrial customer by 20 per cent, residential customers by 17.5 per cent, mining sector by 10 per cent and special load tariff customer by 25 per cent which, he said, were all influenced by a number of government interventions.
He said that government is also reviewing the Karpower plant, AMERI and AKSA plant deals and their implications. Use of the Karpower plant will continue and the Karpower barge will be relocated to Takoradi to be converted into a gas plant which will create a demand for up to 90 mmscfd whilst the balance will be sent to Tema Power Enclave through the limited capacity provided by the West African Gas Pipeline. This way, 40 million USD will not go waste each month.
Honourable Amewu said a project will commence in November to allow a reverse flow of excess gas in Takoradi to be sent to Tema through the WAGP. He said government has also renegotiated the gas price from the previous USD9.8 mmBtu to USD7.89 mmBtu giving Ghana a savings of USD2 on every mmBtu of gas purchased.
He said that the Presidential Committee set up to establish the financial position of Bulk Oil Storage and Transportation Company presented its findings which included unprofitable tolling agreements of USD5.5 MT with the Tema Oil Refinery limited, lower than expected yields from processed crude oil, trade losses resulting from under-recoveries among others. He added that a forensic audit will be commissioned into BOST operations from 2013 to 2018 and those who will be compromised will face the law.
