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August 8, 2020
Front Page Ghana

Gov’t loses over US$200M to illicit activities in petroleum downstream sector

Vice President Dr. Mahamudu Bawumia has expressed  government’s concern about illicit activities in the petroleum downstream industry.

These illicit activities, he said, cost the state over US$200 million per annum in the form of lost direct petroleum tax revenue, subsidies and abuse in the transportation of petroleum products.

Speaking at the commissioning of a command center for the Bulk Road Vehicle (BRV) and the Electronic Cargo Tracking System (ECTS) at the headquarters of the National Petroleum Authority (NPA) in Accra, the Vice President stressed that illicit activities in the petroleum downstream industry requires a multi-pronged solution to ensure sanity in the industry.

He stressed the importance of the petroleum downstream sector in meeting the energy requirements of the country.

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Efficient and effective petroleum products distribution system, he said, is therefore important and essential to the economic growth of the country.

Dr. Bawumia averred that enhancing the NPA’s technological interventions including the Petroleum Product Mark Scheme, the Bulk Road Vehicle Tracking and Volume Monitoring System, the Enterprise Relational Database Management System (ERDMS) and now the Electronic Sealing and Cargo Tracking System will enhance its efforts against illicit activities in the industry.

According to him, the government supports the use of appropriate technology to improve product and service delivery to the people of Ghana and hence finds the introduction of the tracking system very appropriate and timely.

The Government, he said, is committed to improving the movement of petroleum products within the country by developing other modes of transport such as rail, water, and pipeline to enhance the effectiveness and efficiency of petroleum products distribution in the country.

He said, “Government is taking measures to ensure that the Bulk Oil Storage & Transportation Company Limited (BOST) is adequately resourced to lead the transformation of the petroleum product distribution system.”

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“The Government also welcomes private sector participation and has therefore charged the NPA to collaborate with relevant state agencies to attract the necessary private investment and appropriate technology into the sector.”

Chief Executive of the NPA, Alhassan Tampuli, in his welcome address lamented that revenue loss as a result of illicit activities amount to 12.3% of annual freight cost and indicated that in 2014 alone an estimated GH¢43 million was lost to illicit activities.

The Authority, he said, opted for a technological approach in order to have visibility on the movement of the BRVs and the locations where petroleum products are loaded hence the introduction of the Tracking System in 2014.

According to him, the Electronic Cargo Tracking System (ECTS) and the Command Centre will further tighten the controls in the supply chain and also provide a platform for planned control measures to be deployed at the retail outlets to ensure maximum tax revenue mobilisation by the State.

Such a control, he said, will help in the fight against illicit activities in the Petroleum Downstream Industry.

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