In a move to curb various irregularities and sanitise the petroleum downstream sector, government will from next year begin automating all reporting processes in the sector to reduce human interface and provide transparency.
This is one of five new measures aiming to stem the tide of under-reporting, diversion and dilution of fuel products – underreporting and diversion being directly related to product smuggling – and general non-compliance in the petroleum downstream sector as these practices continuously cause government to lose considerable revenue.
The move is part of key strategic measures tabled to ensure compliance in the industry as government takes the needed steps to streamline activities in the sector in general and curb petroleum product smuggling in particular. While petroleum product smuggling has been largely contained since 2018, government is seeking to ensure the practice is not resumed again going forward
The remaining measures being envisaged include providing additional powers to the relevant institutions, most importantly the National Petroleum Authority (NPA) as well as enhancing punitive sanctions to check the abuses.
The rest are revoking the licenses of recalcitrant players in the industry and prosecuting directors and key personnel of such entities; as well as instituting stricter monitoring controls to deal with abuses.
From 2016 to 2018 for instance, discrepancies resulting from revenue under reporting by the downstream petroleum industry amounted to a total loss of about GHc 1.2 billion to government in tax revenue.
This has been a result of disagreements in the reported tax receipts as against the Ghana Chamber of Bulk Oil Distributors (CBOD) expected tax receipts, which were computed based on official NPA volumes and adjusted by Ghana Revenue Authority’s (GRA) reported exemptions and Ministry of Finance’s (MoF) approved variations.
On the other hand, following stringent measures instituted by the NPA in 2018 which aimed at curbing petroleum smuggling in the downstream sector, no losses related to unaccounted stocks have since been recorded.
The feat achieved by the NPA was in contrast with a reconciliation of official stocks movement data which revealed that more than 1.018 billion litres of smuggled stocks could not be accounted for from 2015 to 2017.
However, the outlined strategic measures are expected to prevent such anomalies from reoccurring.
Delivering the 2020 budget statement and economic policy last Wednesday, Finance Minister Ken Ofori Atta said the measures outlined by government aim to ensure that such irregularities are dealt with completely going forward.
“In the coming year, the spotlight will be turned on the sector to address these irregularities and indiscipline that have become characteristic of this industry”, he reiterated.