Parliament has called on the Minister of Finance and the Minister of Energy, Mr John Peter Amewu to as a matter of urgency, activate the cash waterfall scheme and other prudent measures to address the debt accumulation in the energy sector.
The lawmakers further called on the Minister of Finance, Mr Ken Ofori Atta to conduct an audit to determine the level of indebtedness among the State Owned Enterprises (SOEs) in the Energy Sector.
Moreover, the legislators urged the Minister of Finance to consider issuing a new bond to finance the remaining legacy debts in the Energy Sector.
Dr Mark Assibey-Yeboah, Chairman of the Finance Committee whilst presenting a Report of the Finance Committee of Parliament expressed the need to address the growing indebtedness in the sector in order to avert any potential power crisis.
Parliament on Tuesday, approved the Annual Report on the management of the energy sector levies and accounts for the year 2018.
The purpose of the Annual Report is to inform Parliament on the Management and use-of the funds realized from the imposition of the levies under Act899.
The Energy Sector Levies Act, 2015 (Act 899) as amended in 2017 (Act 946), was promulgated in 2015 to address the huge burden and operational challenges facing SOEs in the Energy Sector, support power generation and power supply, subsidize premix and stabilized petroleum prices, support road maintenance as well as fund the activities of the Energy Commission.
To achieve these objects, Act 899 imposed a number of levies namely the Energy Debt Recovery Levy (EDRL), Price Stabilization and Recovery Levy (PSRL), Road Fund Levy (RFL), Energy Fund Levy (EFL), Public Lighting Levy and National Electrification Scheme Levy on the prices of petrol, diesel, MGO, fuel oil, kerosene, LPG as well as electricity. The proceeds from the imposition of the levies are to pay off the huge debt in the energy sector, among others.
The lawmakers also found it unacceptable for the Finance Minister’s intervention to suspend the PSRL without due process to Parliament.
Dr Assibey-Yeboah said the measure might be laudable in order to provide some relief for Ghanaians in the face of escalating petroleum prices at the pumps at the time.
The Committee subsequently urged the Minister of Finance to follow due process by coming to Parliament to get any section of the law amended, thereby upholding the rule of law.
Dr Assibey-Yeboah also observed that an amount of GH¢3,190,738,564.82 was collected as levies for the period as against a programmed collection of GH¢3,507,036,778.77. This resulted in a shortfall in collection of GH¢316,298,213.98 representing a 9.2 per cent shortfall.
He said at the end of 2018, the Energy Debt Recovery Levy (EDRL), Road Fund Levy and Energy Fund Levy outperformed their targets by 7.9 percent, 0.72 percent and 7.29 percent respectively.
He said the positive performance of the levies was on account of 11.79 percent increase in consumption volumes in 2018 compared with the same period in 2017.
Mr John Jinapor, Member of Parliament (MP) for Yapei Kusugwu, in his comment expressed concern about the mounting indebtedness in the country’s energy sector.
He urged the government to take careful measures to address the debt accumulation, saying, “if nothing is done the sector may collapse.”
He said Minister of Energy had no business to suspend the PSRL and that it was only parliament that had the power to vary a tax or levy.
Mr Anthony Effah, MP for Asikuma-Odoben-Brakwa in his comment on the report stated that the levies collected over the period were properly lodged into the established accounts.
He said the evidence was given by the percentages of the collections of levies that were actually lodged.
He explained that for the utilization of the energy sector levies, a significant portion of the amount went into the ESLA plc for managing the debts of energy sectors SOEs and also provided support for premix and residual fuel.