Ghana has incurred a loss of $8.3 million due to its failure to impose penalties on surface rentals.

This is according to a recently released Auditor General’s report.

The Auditor General attributed the development to sanction companies defaulting on their payments as stipulated by the Petroleum Revenue Management Act, 2011 (Act 815), Section 3.

As outlined in the Act, organisations that do not make timely payments should incur an extra fine equivalent to either five percent of the initial sum for each day of delay or the rate prescribed by alternate legislation, whichever happens to be greater.

This formed part of the Auditor-General's assessment of the management of petroleum funds during the time frame spanning from January 1, 2022, to December 31, 2022.

The report revealed that surface rentals were due to reach $2.8 million by the end of 2022, making up 80 percent of the expected income for the year.

Significantly, four contractors, whose Petroleum Agreements were canceled by the Minister of Energy, owed a notable portion of the outstanding amount, specifically $1.8 million.

The Auditor-General suggested that the Ghana Revenue Authority (GRA) should take steps to guarantee prompt payment of surface rentals. These steps include obtaining bank guarantees from exploration firms and conducting comprehensive due diligence and Know Your Client (KYC) assessments for companies engaged in oil-related operations.

In addition, the report recommended that both the Petroleum Commission and GRA should apply additional fees to companies that fail to meet their obligations, following the guidelines outlined in Section 3 of the PRMA 2011 (Act 815).

Reacting to the report's conclusions, the GRA affirmed that it had commenced enforcement actions, such as sending Demand Notices to companies that had failed to meet their obligations.

Conversely, the Petroleum Commission indicated that it had refrained from granting specific approvals to contractors who were not in compliance, and it committed to supporting the GRA in evaluating and recovering penalty fees.