Use $550mn crude oil sales windfall to cushion consumers – Energy expert to gov’t
An energy expert has projected that Ghana will earn an additional $550million from crude oil sales.
This is aside the government’s expected $1billion revenue from Ghana’s crude oil sales.
According to him, this unexpected windfall could go a long way to help government cushion consumers from sharp price hikes that have characterized the cost of fuel at the pumps in the past months.
“It will be prudent of government to cease worrying about revenue losses as it plans to reduce levies on petroleum products and instead look at the extra revenue it will make from oil sales, royalties and taxes from oil companies”, Former Ghana National Petroleum Corporation boss, Alex Mould urged during a TV program yesterday.
“Because our benchmark price was about $61 or something like that and the average price that is projected by all the research companies in the world is showing that our crude oil price is going to be no less than $85 for the full year.
“For the first quarter we’re going to look at something above $100, the second quarter it will drop to about $90, and for the rest of the year it will be in the $80s. So the average for the year is going to be about $85 to $90.
“So if you look at the windfall, and we should understand that government will be getting windfall, because government has only budgeted for $61 and so my calculation based on that shows us that based on 59 million barrels of crude oil, Ghana gets about 20% of the total crude oil and it is split between royalties and also something we call the CAPI. And CAPI is basically the Carried and Participatory Interest and then we have taxes,” he said.
“We’re looking at an increase in royalties from this $20 increase for about $68million with regards to our equity contribution we are looking at about $250million and with regards to taxes, this is from the windfall that will come, we’ll derive to be partners because of the Tullows, the ENIs we’re looking at about $235million.
“So in all we’re looking at windfall of almost $550million coming the way of government. And this is something government should look at critically if government wants to use part of that to subsidise the price for the consumer,” he added.