The Auditor General has disclosed that the failure to impose penalties on oil companies for delayed payment of surface rental has resulted in a loss of more than $8.3 million in revenue.

The Auditor General’s report highlighted that companies defaulting on their payments were not being penalized as required by the Petroleum Revenue Management Act, 2011 (Act 815), Section 3.

According to the Act, entities failing to pay on time should face an additional penalty of five percent of the original amount for each day of default or the rate specified by other laws, whichever is higher.

This revelation was part of the Auditor-General’s report on petroleum funds management for the period between January 1, 2022, and December 31, 2022.

The report disclosed that by the end of 2022, the total due from surface rentals was $2.8 million, constituting 80 percent of projected receipts for the year.

Notably, $1.8 million of the outstanding sum was owed by four contractors whose Petroleum Agreements were terminated by the Minister of Energy.

The Auditor-General recommended that the Ghana Revenue Authority (GRA) take action to ensure timely surface rental payments, including requesting bank guarantees from prospecting companies and conducting thorough due diligence and Know Your Client (KYC) checks for companies involved in oil-related activities.

Furthermore, the report advised that both the Petroleum Commission and GRA should impose surcharges on defaulting companies, adhering to the provisions of Section 3 of the PRMA 2011 (Act 815).

In response to the report’s findings, the GRA stated that it had initiated enforcement measures, including issuing Demand Notices to defaulting companies.

The Petroleum Commission, on the other hand, mentioned that it had withheld certain approvals from non-compliant contractors and pledged assistance to GRA for assessing and collecting penalty charges.