President John Mahama has revealed that due to the falling crude prices on the international market, the country has lost billions of cedis to the national treasury.
He was speaking at a news briefing at the Flagstaff House organized to commemorate his third year in office as president.
He said, “From above $90 to 30, we have lost billions of cedis into the national treasury.”
President Mahama said government took the decision in July last year to “deregulate the prices of petroleum product,” adding since July, “there has been an accompanying reductions in petroleum prices.”
He said, “We still are below the deregulation point by almost 11%,” justifying the recent fuel hikes.
Analysts are predicting that Ghana runs the risk of losing GHC 800 ($200M) million due to the fall in crude oil prices to about $32 per barrel.
Finance Minister Seth Terkper budgeted US$53.02 as price per barrel as his benchmark price for this year. Since the presentation, crude prices have dropped to 11 years low.
Government is expected to cut its petroleum revenue projection.
The times quoted unnamed source as saying “it has become a question of when government will act to cut its losses, rather than whether such a move is prudent.”
Terkper scaled back revenue projection last year from GH¢4.2billion to GH¢1.5billion after crude prices fell by more than half.
The economy’s bright prospects -- largely anchored in the expectation of an expansion in the oil sector -- could be jeopardized by the decline in crude oil prices, the Institute of Fiscal Policy has said.
Its Executive Director said that the persistent fall in price of black gold could act as a disincentive to oil exploratory activities -- and to some extent ongoing works such as the Tweneboa, Enyerra and Ntomme (TEN) oilfields.
“The implication is that the medium-term prospects are completely undermined because the medium-term prospects are based on these new oil projects. Of course, some of these projects will slow down due to the low prices. The TEN Project [expects its first oil in mid-2016], though they have started, may not have the enthusiasm they had.
“Also, this price fall means that investment in new exploration is not likely to come,” he said.