Former Finance Minister Seth Terkper believes that a sustained high price for crude oil on the international market will help the government generate much-needed revenue this year.
From a revenue target of GH72 billion in 2021, the government has set a new target of GH100 billion for 2022, hoping that the upcoming implementation of the Electronic Transfer Levy, along with other measures, will assist in meeting the high target.
So far this year, a barrel of Brent Crude oil has risen from around $76 at the start of the year to a high of around $140 in early March, before settling back to around $100 in recent days.
The hike in the price of the commodity has been brought about mainly as a result of Russia’s military operation in Ukraine.
While the high price of Brent Crude oil has affected prices of petroleum products on the Ghanaian market, including the price of fuel at the pumps which has risen by about 50%, others believe government also stands to benefit, the more prices stay high on the international market.
As a net exporter of oil, government in the 2022 budget set the benchmark crude oil price for the year at $61.23 per barrel, up from the $54.75 per barrel for 2021.
Despite a drop in the volume of oil exported by Ghana, data from the Public Interest and Accountability Committee (PIAC) has disclosed that Ghana’s revenue from oil production increased by 17.5% in 2021 to US$783.33 million by the end of the year, mainly on account of higher fuel prices.
In an interview with Citi Business News, Seth Terkper noted that the revenue target for this year is too ambitious, but admits that high crude oil prices could make a difference.
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- Ghana’s total petroleum revenues have increased by 17.5 percent, according to the PIAC report.
“Let me add that crude oil will make a difference because a lower benchmark will have been used by government. We are waiting to see if there will be modifications made to the benchmark in the mid-year budget review. Like ourselves, we used $56 to replace $99, now it’s going to be the reverse. So crude oil revenue is going to come in and is going to contribute to achieving the year’s revenue target.”
