Ghana: Energy Minister Suggests Ways To Deal With Fall In Future Oil Prices

Ghana’s Minister for Energy, John- Peter Amewu has suggested that the country should build what he calls a sliding skill behaviour into its fiscal regime to ward-off shocks of low oil prices in future.

According to him, without that, the International Oil Companies (IOCs) and governments would continue to suffer anytime oil prices fall.

Amewu made this suggestion in an exclusive interview with energynewsafrica.com.

Oil prices on the international market have plummeted due to the outbreak of Coronavirus, which has slowed demand for the commodity.

Crude oil prices went as low as $11.78 (WTI) and $17.73 (Brent) on April 22, 2020.

“So, maybe, this is a lesson for us to begin to look into a sliding skill into our fiscal regime to address this fluctuating oil price,” Mr Amewu indicated.

The Energy Minister noted that Covid-19 has had a negative effect on all global economies and Ghana is not an exception.

Touching on Ghana’s upstream sector, he said companies like Aker Energy has postponed the development of PECAN project because most of the expatriates they need to bring cannot come because the country’s land and air borders have been shut because of the outbreak of coronavirus.

“Covid-19, as you rightly put, has had a lot of impact on some of these companies so yes, it is true they postponed their development activities but that doesn’t mean they will not come back when the situation calms. Most of these companies will come back,” he explained.

Commenting on how the government intends to sail through this Covid-19 period, Mr Amewu noted that it has thrown the country’s budget out of gear, but he trusted the Finance Minister to undertake financial re-engineering to cushion the Ghanaian economy in this trying times.

Addressing whether Ghana would engage oil exploration companies in this Covid period, he said low price could be the bargaining power of these companies so, the government would wait for a stable price period to engage them in future.

“Government’s budget has been hit extensively in terms of the revenue… billions of dollars have been lost as a result of the fall in oil price but the Finance Minister is on top of the game, he is trying to restrategise and relook at some of our expenses to expand and see where he can get some extra sources of funding to address some of these problems. So I think we are on course as a country,” he assured.

Source: www.energynewsafrica.com