Energy Minister, CBOD halt downstream monitoring deal handed to SML by GRA

The Energy Minister, Matthew Opoku Prempeh, and the Chief Executive of the Chamber of Bulk Oil Distributors have raised concerns about the resumption of work by Strategic Mobilisation Limited (SML) in monitoring operations in Ghana’s Downstream Petroleum sector.

The two officials highlighted issues with SML’s technology, stating that it was inferior to the revenue monitoring systems developed by the Ministry of Energy, Ministry of Trade and Industry, and other stakeholders based on the Singaporean Standard.

In a letter to the Commissioner-General of the Ghana Revenue Authority (GRA), the Energy Minister emphasized the importance of adhering to the new standards developed for measurements in the oil and gas sector, which utilize the Coriolis mass flow metering system.

Meanwhile, the GRA had directed SML to restart its monitoring activities in the downstream petroleum sector effective June 14, 2024, following a comprehensive audit by KPMG. The audit concluded that SML contracts had breached several laws, including the Public Financial Management Act, and should go through Parliament for approval.

The Ministry of Energy also announced the development of new measurement standards for the oil and gas sector in collaboration with the Ghana Standards Authority (GSA) and other stakeholders, based on the Singaporean Standard and utilizing the Coriolis mass flow metering system.

These developments follow President Akufo-Addo’s commissioning of KPMG to audit the contract between the GRA and SML, which revealed significant financial details, including payments received by SML totaling GH¢1,061,054,778.00 from 2018 to the present.

In light of these revelations, the CBOD CEO, Dr. Patrick Ofori, emphasized the existing mechanisms in place to ensure effective monitoring and mobilization of government revenue from the downstream petroleum sector, including systems by the National Petroleum Authority (NPA), the GRA, and tracking systems for fuel transportation.

The GRA’s directive for SML’s operational resumption and the introduction of new measurement standards aim to enhance revenue collection in Ghana’s downstream petroleum sector and ensure accurate and reliable monitoring services.

However, Dr. Ofori noted that there are more than four mechanisms in place to safeguard government revenue, suggesting a need for further scrutiny to ensure the effectiveness of these systems in protecting government revenue.

The government’s efforts to enhance revenue assurance in the downstream petroleum sector underscore the importance of implementing robust monitoring systems to safeguard public funds and ensure transparency in the industry.