20.4 C
New York
September 17, 2019
The Republic
  • Home
  • News
  • GNPC fights back after Finance Minister queries $34m crude oil loss

GNPC fights back after Finance Minister queries $34m crude oil loss

The Ghana National Petroleum Corporation (GNPC) is denying any wrongdoing after it was accused by the Finance Minister of underpricing Ghana’s crude oil causing the nation to lose about $34 million.

The loss according to Ken Ofori-Atta occurred under the current boss, K.K. Sarpong.

In a July letter to Mr Sarpong, the Finance Minister raised alarm about the alleged underpricing and demanded an explanation to how it occurred.

Mr Ofori-Atta in his query letter said the GNPC gives the off-taker the option to choose whichever five-day moving average of prices to use for determining the value of the cargo.

This is not supposed to happen and has “given the off-takers the latitude to choose lower prices to value the TEN crude oil.”

The letter continued that “our analysis reveals that, in five out six cases, TEN crude oil was priced lower than the lowest possible Brent crude oil price based on different five-day moving averages within the 30-day window before the B/L date.

“All liftings, except the fifth, were affected by this low pricing phenomenon. The potential loss. Based on the low scenario is approximately $9.83 million,” the letter added.

The Finance Minister said had the GNPC insisted on the highest possible price within the pricing window, the State would have gained $34.12 million.

He asked the petroleum regulator to amend the defective contracts based on which the crude oil was sold.

But in an interview with Joy News’ Evans Mensah, the GNPC says it has done nothing wrong and there is no basis to amend the crude oil sale contract as demanded.

General Manager in charge of Commercial Joseph Dadzie said their position on the issue has been communicated to the Finance Ministry and they appear satisfied with them.

On how the crude oil got to be underpriced, he explained that “there was some misunderstanding as to the nature of those transactions and even how that pricing was done.”

He is however convinced that the responses and evidence they have submitted to the Ministry should suffice, adding “as far as we are concerned, we don’t think there is any merit in the fact that we undersell the crude”.

In his response to why the off-takers are allowed whichever five-day moving average prices to use for determining the value of the cargo, Dadzie said there was a lot more to the transaction that has been made public.

He explained that pricing options are a standard market practice and so what is provided does not give any advantage or disadvantage to whoever buys from the GNPC.


The deal in question he clarified is “not a straightforward crude oil sales and purchase agreement. It involves other transactions and so you need to look at it within the context of the other transactions that were put together.”

Singling out the crude oil transaction therefore to say it has created a loss to the state will be inaccurate, Dadzie said.

He added “there is no loss to the state, in fact if we are to look at the totality of the transaction there would probably be more money for the state than whatever loss anybody is talking about.”

Related posts

Evicting Judges for Cathedral undermines Judicial Independent’s-Agalga Hon James Agalga, Member of Parliament (MP) for Builsa North has condemned the decision of the government to evict some Judges from the residence at the Ridge residential enclave to pave way for construction of a national cathedral. According to him, though as a Christian he is not against building of a national Chapel, he believed the decision to evict some Judges to pave way for the Cathedral was not only a misplaced priority, but a threat to the independency of the Judiciary as it could mean that, the Executive arm of government could manipulate the judiciary including their sleeping places. Speaking some Journalists in an interview in Accra over the week, Mr Agalga who is a Former Deputy Minister for the Interior lauded the initiative to construct a National Cathedral project but disagreed with the approach of government to realising the good project. In his considered opinion, the government should find a more spacious land space to site the cathedral rather than settling on the Ridge space which is currently the home of some superior court judges and other state institutions. He added that, the matter remained sensitive because, the condition of services of Judges are been undermine and posed serious threat to their independency, stressing that, Ghana is not a Theocratic state but a secular country where there is freedom of worship and association. Mr Agalga questioned whether the government would be able or willing to do same for other Faiths like the Muslims and the traditional believers. He stated that, the controversy could have been avoided if government had given other prime areas in the country for the National Cathedral rather than it current location. The National Cathedral of Ghana is a planned interdenominational Christian cathedral scheduled to be built in Accra, the nation’s capital, as part of Ghana’s 60th-anniversary celebrations. The design of the Cathedral was unveiled by the President Nana Akufo-Addo in March 2018. The Cathedral would have an auditorium capable of seating 5,000 as well as the requisite chapels and a baptistery. The site will also house a music school, an art gallery and a museum dedicated to the Bible. The design of the Cathedral reflects the art and culture of Ghanaian ethnic groups; the high ceilings and a staggered roof is reminiscent of Akanian architecture and the facade would be concaved, decorated with timber in imitation of Ashanti royal stools. The architect for the project is David Adjaye, a British-Ghanaian.

Felix Nyaaba

Akufo Addo Daughter, Others CEOs Hot Over Poor Performance

Felix Nyaaba

Dr Apaak Track Records Yields Unopposed Primaries For Builsa South NDC

Felix Nyaaba


Leave a Comment