Secure 40% projected revenue in Stabilization Fund against oil price fluctuations – ACEP
The Africa Center for Energy Policy (ACEP), says government should secure some 40 percent projected revenue in the Stabilization Fund to shield the country against unstable oil and gas pricing on the international market.
A petroleum fund report issued by the central bank of Ghana showed that corporate taxes due the government from oil producing companies fell by 42 percent for the second half of 2019, compared to the first half of the same year.
Between July and December 2019, Ghana recorded 51 million dollars less in corporate taxes compared to January to June same year.
Executive Director of ACEP, Benjamin Boakye, believes that oil prices are bound to suffer some fluctuations however, it will be prudent for Ghana to secure a constant 40 percent projected revenue in the Stabilization Fund to lessen the effects.
“Our recommendation has been that at least we should have about forty percent of the projected revenue in the stabilization account. That should be enough to offset any instability in the international market,” he said.
The report further showed Tullow Oil filing zero corporate tax for the period under review.
ACEP says government can rake in more revenue aside royalties amongst others.
“In the petroleum industry, the volatility isn’t new. The remedy in the petroleum management act was to ensure that we have enough buffer in the stabilization account. For the projections it is easy to do; but whether you are able to produce is the main question or whether the market will give you the right price that allows you to meet your projections; that is not really in your hands. It’s not something to really worry about but the plans to mitigate them to ensure that they are duly in place are what we should worry about,” Mr. Boakye explained.
Mr. Boakye was speaking to Citi Business News on the sidelines of the launch of a report on Disability Interventions in Ghana.