By Jeorge Wilson KINGSON
Government is expecting to derive estimated revenue of GH¢330 million from the (Tema Oil Refinery) Debt Recovery Fund for the 2011 financial year.
Deputy Minister for Finance and Economic Planning, Seth Terkper, announced this recently when he met the Finance Committee of Parliament during the consideration of the Debt Recovery (Tema Oil Refinery Company) Fund (Amendment) Bill, 2010.
The bill repeals Act 713 and amends the Tema Oil Refinery Act 2003 (Act 642) to replace the schedule and increase the levy on specified petroleum products. It seeks to replace the schedule to the Act with a new one that specifies new levels of debt recovery levy on petroleum products.
The new bill, as passed by parliament recently, increases the debt recovery levy on the various petroleum products to include eight pesewas on each liter of Premium And Gas Oil, three pesewas on a liter of Marine Gas Oil (MGO), four pesewas on a liter of Residue Fuel Oil (RFO) and five pesewas on a liter of Liquefied Petroleum Gas (LPG).
Seth Terkper told the committee that the aim of the bill was to relieve the Tema Oil Refinery (TOR) of its debt overhang so as to firmly position the company to play a significant role in the emerging petroleum industry, especially in the downstream sector.
It was observed that last year government refinanced about GH¢ 445 million of TOR’s debts as part of measures to stabilize the company. Members of the committee encouraged government and the security agencies to do everything possible to curb smuggling of petroleum products from Ghana to neighboring countries.
“The committee, having scrutinized the bill, found that its passage would help in the speedy repayment of TOR’s debts in order to put the company on a sound financial footing,” the chairman of the committee, James Avedzi, stated.
In 2003, the then government established a debt recovery fund through the (Tema Oil Refinery Company) Debt Recovery Fund Act to finance TOR’s accumulated debt and to cater for the company’s cost under-recovery. A debt recovery levy was imposed on specified petroleum products.
TOR’s debt burden however remains high and burdens the financial health of the country’s banking system. Government is therefore proposing an upward adjustment to the current debt recovery levy to retire the TOR debt and to prevent continuous accumulation of debts in order to alleviate the effect of the debt on the banking system.
Government is expecting to derive estimated revenue of GH¢330 million from the (Tema Oil Refinery) Debt Recovery Fund for the 2011 financial year.
Deputy Minister for Finance and Economic Planning, Seth Terkper, announced this recently when he met the Finance Committee of Parliament during the consideration of the Debt Recovery (Tema Oil Refinery Company) Fund (Amendment) Bill, 2010.
The bill repeals Act 713 and amends the Tema Oil Refinery Act 2003 (Act 642) to replace the schedule and increase the levy on specified petroleum products. It seeks to replace the schedule to the Act with a new one that specifies new levels of debt recovery levy on petroleum products.
The new bill, as passed by parliament recently, increases the debt recovery levy on the various petroleum products to include eight pesewas on each liter of Premium And Gas Oil, three pesewas on a liter of Marine Gas Oil (MGO), four pesewas on a liter of Residue Fuel Oil (RFO) and five pesewas on a liter of Liquefied Petroleum Gas (LPG).
Seth Terkper told the committee that the aim of the bill was to relieve the Tema Oil Refinery (TOR) of its debt overhang so as to firmly position the company to play a significant role in the emerging petroleum industry, especially in the downstream sector.
It was observed that last year government refinanced about GH¢ 445 million of TOR’s debts as part of measures to stabilize the company. Members of the committee encouraged government and the security agencies to do everything possible to curb smuggling of petroleum products from Ghana to neighboring countries.
“The committee, having scrutinized the bill, found that its passage would help in the speedy repayment of TOR’s debts in order to put the company on a sound financial footing,” the chairman of the committee, James Avedzi, stated.
In 2003, the then government established a debt recovery fund through the (Tema Oil Refinery Company) Debt Recovery Fund Act to finance TOR’s accumulated debt and to cater for the company’s cost under-recovery. A debt recovery levy was imposed on specified petroleum products.
TOR’s debt burden however remains high and burdens the financial health of the country’s banking system. Government is therefore proposing an upward adjustment to the current debt recovery levy to retire the TOR debt and to prevent continuous accumulation of debts in order to alleviate the effect of the debt on the banking system.
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