Ghana: Scrap Subsidy On Marine Gas Oil – COMAC Demands

The Chamber of Oil Marketing Companies (COMAC) in Ghana is urging the government to scrap the subsidy on Marine Gas Oil (MGO), arguing that this move could save the nation millions of cedis.

COMAC claims that some unscrupulous individuals in the industry are diverting the product to retail outlets to sell for private gains. The subsidy was introduced to reduce the cost of the product for the local maritime industry, including trawlers and maritime security operations.

The aim was to support a critical sector that underpins Ghana’s food security and coastal border protection framework.

However, addressing a press conference in Accra on Monday, the Chief Executive Officer of COMAC, Dr Riverson Oppong, and the Chairman of the Chamber, Gabriel Kumi, said the chamber received credible reports and formal complaints from industry stakeholders indicating widespread abuse of the low-tax Marine Gas Oil subsidy.

According to them, these reports have been substantiated by a formal investigation by the Office of the Special Prosecutor (OSP).

They alleged that there are significant revenue losses linked to illegal bunkering activities in Ghanaian territorial waters, where subsidised fuel is being diverted for unauthorised commercial use.

“The implications of these illegal operations result in higher operating costs for genuine beneficiaries in the fishing industry and unfair competition against tax-compliant PSPs,” they said.

These illegal activities have resulted in an unsustainable 553 per cent increase in MGO local volumes over the 2022-2024 period, which, according to the chamber, is worrying.

“This situation raises serious concerns about the effectiveness of regulatory enforcement and the integrity of existing control systems,” they said.

COMAC believes that removing the subsidy would help restore market fairness and generate critical revenue to reduce the energy sector’s debt burden.

They also want regulatory institutions to strengthen their oversight and ensure strict enforcement of regulatory measures to prevent diversion and curb ongoing tax evasion.

Source: https://energynewsafrica.com