Increase in ESLA: Revenue to be ring-fenced…to pay energy legacy debts

President John Dramani Mahama has assured that revenue to be realized from the Energy Sector Levies (Amendment) Act would be strictly ring fenced to pay legacy energy sector debts, finance ongoing fuel purchase and avert the risk of recurring power shortages.

“Funds from this levy will not be subject to the hazards of the consolidated fund. The fund will be regularly audited and audit report made public to ensure its transparent use,” he stated.

The President gave this assurance at the Presidency in Accra yesterday when he received the final report of the National Economic Dialogue.

Parliament, under a certificate of urgency passed the Act on Tuesday to impose additional GHC1 on every litre of petroleum product amidst walkout by the minority caucus.

President Mahama said though difficult, the passage of the revenue bill was justifiable to defray the US$3.1 billion debt suffocating the power sector and the additional US$1.8 billion more required to finance fuel procurements for uninterrupted thermal power generation in the coming months.

If left unaddressed, he observed that the situation threatens national productivity and industrial growth.

The President noted that though strategies have been put in place to improve the sector, there was the need to take advantage of the recent gains by the Ghana Cedi to accelerate the solution to the challenges in the energy sector.

He estimated that the increment in the levy was expected to rake in additional GHC 5.7 billion annually to address the challenges in the energy sector.

“With the gain in macro economic stability and strengthening of the cedi, this levy is not expected to result in any immediate fuel price increases at the pump,” President Mahama assured.

“We are fully aware of the burden this will place on households and businesses but I want to assure Ghanaians that this decision was not taken lightly.”

He stressed that while initially much of the revenue from the amended act would go into the purchase of fuel to ensure stable supply of electricity, ongoing developments in the upstream sector is expect to deliver more gas from ENI, Sankofa, Jubilee avd TEN fields to power the plants.

With assurance of gas from the West Africa Gas Pipeline, the use of liquid fuels would be substantially reduced in the energy mix.

“At that stage, the resources to be realized from this levy will be channeled to pay down accumulated legacy debts in the power sector.”

Government, President Mahama said would continue to work to reduce systemic inefficiencies in the energy procurement and distribution sectors while enhancing targeted social interventions for vulnerable groups.

BY JULIUS YAO PETETSI

The post Increase in ESLA: Revenue to be ring-fenced…to pay energy legacy debts appeared first on Ghanaian Times.

Read Full Story