The National Petroleum Authority (NPA), Ghana’s petroleum downstream regulator, saved the country almost GH¢1 billion in 2018 through tight monitoring of national fuel stocks, according to the sector’s 2018 annual report. Preventing the illicit sale of petroleum products in-country earned the state some GH¢952 million savings and was quite the opposite of losses made via unaccounted stocks and evasion of taxes three years prior – from 2015 to 2017.
The downstream report published by the Ghana Chamber of Bulk Oil Distributors (CBOD) attributed the cause of these savings to consistent interventions by the NPA to stop fuel smuggling while making sure refined petroleum products went onto the market legitimately.
The regulator had recorded no loss relating to stocks unaccounted for in 2018 as the report revealed that “574.25 million liters more than the official stocks saleable in the country were sold. This indicates that smuggled stocks in the monitored depots must have been trapped as a result of the NPA’s regulatory interventions to curb the illicit trade of petroleum products and forced to be sold through official channels. This saved the nation GH¢797.49 million in taxes and GH¢154.93 million in regulatory margins yielding a total savings of GH¢952.42 million,” the report said.
The Illicit Fuel Trade;
The illegitimate trade in refined petroleum products in the downstream sector is usually characterized by activities such as bunkering, smuggling using unapproved offshore routes, dumping of gasoil declared for sale to foreign vessels at local filling stations, under-declaration and non-declaration of products lifted at depots, diversion of subsidized social products such as premix fuel (for fishermen), as well as siphoning of LPG from Bulk Road Vehicles into surface tanks at illegal LPG tanks.
NPA has estimated that the country loses over US$200 million every year to these activities in the form of direct losses in petroleum tax revenue, and subsidies that do not reach intended beneficiaries, among others.
Data from the Authority indicate that between 2015 and 2018, total taxes evaded based on official unaccounted stocks was GH¢1.3 billion while total under-reported taxes based on official accounted sale volume after adjustments for exemptions stood at GH¢1.2 billion. “
This implies that the country has lost a total of GH¢2.6 billion in taxes for the period. Combined with the evaded regulatory margin of GH¢231.53 million, a total GH¢2.790.59 million has been lost in taxes and regulatory margins for the period 2015 to 2018,” the report stated.
However, in collaboration with the Ghana Revenue Authority, Navy, and other security agencies, NPA introduced some upgraded digital solutions including the Enterprise Relational Database Management Software (ERDMS), Petroleum Products Marking Scheme, Bulk Road Vehicle Tracking and Volume Monitoring System, and the Electronic Sealing and Cargo Tracking System.
The government also launched a digital Command and Control Centre to track the movement of all petroleum products in real-time to help reduce losses; an Electronic Cargo Tracking System (ECTS) to be manned by the NPA together with other stakeholders in the sector.
NPA is also planning to deploy Automatic Tank Gauging and Stock Management and Monitoring Systems at retail outlets in the country to give regulatory authorities -NPA and GRA- a real-time view of petroleum product stocks and movements at all retail outlets and depots in the country.