Business

Ghana Gas struggling to operate due to failure of VRA to pay $500 million debt

Failure of the Volta River Authority(VRA) to pay some $500 million it owes the Ghana Gas Company is said to be having a toll on the production of gas in the country.

The Volta River Authority has failed to pay an amount of $500 million to the Ghana Gas Company.

Failure to pay the debt which has prolonged for some years is said to have had a toll on gas production and lean gas by the company.

However, VRA paid 30% of the total debt as at May 2017, which still leaves a huge sum unpaid.

Chief Executive of the Ghana National Gas Company, Dr. Ben Asante has stated that government’s inability to pay for the service rendered by his organization has had a negative impact on operations.

He was speaking at the Citi Business Festival under the auspices of the Ghana International Petroleum Conference (GhIPCON).

“The challenge is that we supply to customers and they don’t pay us. Our brothers and sisters at VRA owe us a chunk of this money, he lamented.”

He noted that both companies are in talks to resolve the situation and added that he was hopeful that the debt would be paid in coming days.

A report by the World Bank in 2015 indicated unnecessary taxes, duplication of roles and corruption in the industry which has contributed to challenges being faced by the industry.

Dr. Asante explained that “the situation is not the best. We have taken some of the best steps to get clarity in terms of who does what in the gas value chain. Right from who is doing aggregation, who is doing shipping, who is doing transportation and processing and who is doing the sales’ part should all be streamlined.”

The second edition of the conference brought together hundreds of industry players in the Oil and Gas downstream sector including Oil Marketing Companies and Bulk Oil Distribution Companies among other stakeholders.

 

 

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