The price of Brent crude declined to a record low of below 40 dollars last week.

This is because the Organization of the Petroleum Exporting Countries (OPEC) decided not to cut oil output despite excess supply.

The 2016 budget statement quoted an estimated crude oil price of 53.05 dollars per barrel with anticipated revenues from the petroleum sector pegged at GH¢2,008.4 million.

This figure, some industry watchers predict the government may be forced to revise if the development persists.

An economist, Dr. Samuel Nii-Noi Ashong told Citi Business News, rationalizing expenditure will reduce the impact on Ghana, which is a net importer of oil.

“We are a net importer of oil so the oil prices declining is good for us in terms of oil imports to fuel the thermal plants and all others,but in terms of revenues accruing to the budget, it will be smaller. But on the other hand,we are going to have some respite in the supply of oil and other petroleum products for consumers,” he said.

Dr. Nii-Noi Ashong added, “If the prices come down below the 53 dollars target, that will affect government’s revenues which means either the government cuts down on expenditure or a deficit will be created which will have to be financed from other sources.”

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By: Pius Amihere Eduku/citifmonline.com/Ghana

The post Economists urge prudent expenditure as oil price dips appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”wFoo3szDkacNZHu3ZeZyPEmWLKIvxDkD”]Crude prices have been sinking on the global market for some time now, this morning it sank deeper across the world  closing at its lowest level since February 2009 on worsening oversupply concerns and a stronger dollar at about $36.97.

The drop in the price of crude is expected to hurt Ghana’s revenue and foreign exchange accounts which will have a negative impact on the cedi.

However the fall comes with some positives especially for buyers of petroleum products.

A visit to some OMCs today 18th December, 2015, showed prices of petrol, diesel and kerosene have reduced between 1 and 3 percent in line with the two-week price review window which is part of the full deregulation of the downstream petroleum sector.

At Total, the price of a litre of petrol for instance has been reduced by 8 pesewas and it is now selling at 2 cedis 699 pesewas; diesel has declined by 5 pesewas and it is now selling at 2 cedis 649 pesewas.

The price of Kerosene has also declined by 9 pesewas and it is now selling at 2 cedis 709 pesewas per litre.

Goil has also reduced its prices.

However, Champion oil has maintained prices of petroleum products at least for the past two weeks.

A litre of petrol is selling at 2.685 pesewas while a litre of diesel is selling at 2 cedis 625 pesewas.

Meanwhile the OMCs are predicting a further fall in the prices in the coming weeks.

They however contend the impact will be minimal due to the continuous depreciation of the cedi and the recent increase in the US Fed interest rate.

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By  Pius Eduku Amihere

The post Fuel prices reduce marginally appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”MU85lTJgX3DJaU3Id7bq62YgEJR5vP3c”]At around 02:20 GMT, West Texas Intermediate (WTI) for January delivery was trading at $34.77 per barrel, 18 cents off its close of $34.95 in New York.

European benchmark Brent crude for February was down nine cents to $36.97.

Oil is trading near levels last seen at the height of the last global financial crisis as producers including the OPEC group continue pumping despite depressed prices and anaemic global demand.

Adding to the commodity’s woes is the US Federal Reserve’s decision on Wednesday to raise benchmark interest rates for the first time in nine years, boosting the dollar and thus making crude more expensive for buyers with weaker currencies.

“WTI sinking further below $35 in the morning is likely the result of the strengthening dollar,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.

“In addition to this, Brent’s January 2016 contract has expired, which is causing spread traders to close off their WTI January 2016 contract positions.”

Gene McGillian, broker and analyst at Tradition Energy, said oil prices will probably test the lows of 2008, which would bring WTI to the vicinity of $32 a barrel.

“Until we see signs that production is basically beginning to come down somewhere in the world… that the economic activity is going to pick up and boost fuel demand, the market is going to remain at these low levels and grind towards those areas we bottomed at during the Great Recession,” McGillian said.

Meanwhile analysts have impressed on government to be prudent in its expenditure in order to benefit from the global declining crude oil prices. Some industry watchers are predicting that Finance Minister Seth Terkper may be forced to revise its targets of oil revenues next year if the development persists.

Economist, Dr. Samuel Nii-Noi Ashong tells Citi Business News, rationalizing expenditure will reduce the impact on Ghana, which is a net importer of oil.

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By:  Citifmonline.com/News24.com

The post Oil sinks below $35 as supply glut worsens appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”7xpNI4AWiVJDiBrM5vsECN6l0HnHKRul”]According to its Chief Director, approval of payment for the contract, followed prior approval by cabinet and parliament respectively.

The power ministry has come under intense pressure for its alleged role in the signing of the 510 million dollar deal with, Umar Farouk Zahoor; in the generation of 250 megawatts of power by AMERI.

The Ministry has since denied the allegations insisting it followed due process.

Some have begun questioning the role played by the Finance Ministry in this development but Major Retired M.S. Tara tells Citi Business News the Ministry cannot be faulted.

“If there is a transaction that emanates from a ministry like the AMERI power deal, a joint cabinet memo is issued and signed by the Ministry of power and submitted to finance as a co-sponsor if we go through the term sheet and if it is attainable, the sector minister will endorse it then forward it to cabinet’.

“It is subsequently sent to Parliament to be looked at both the committee and House levels, no agreement can be entered into by the ministry of finance unless it is specifically approved by Parliament,” Major M.S. Tara stated.

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By: Pius Amihere Eduku/citifmonline.com/Ghana

The post Don’t drag Finance ministry into AMERI deal fray appeared first on Citi 97.3 FM - Relevant Radio. Always.

The price of a barrel of the commodity over the weekend fell below 40 dollars, the lowest since 2009.

The price of Brent Crude fell 5.3% to 40.73 dollars a barrel.

[contextly_sidebar id=”fyMpVZPoFuAAmULaR11Kk7pOAsroROuy”]The drop follows Friday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) not to cut output despite the supply glut which is depressing prices.

There are fears however that the drop could worsen in the coming months and into next year as OPEC is not likely to consider its output ceiling – which had been set at 30 million barrels a day – until next June.

CEO of Tullow, Aidan Heavy tells Citi Business News the development is worrying.

“If you look at the report on the major oil producers in the world right now they are all in the negative. The major OPEC producers cannot continue at 50 dollars, if you look at the oil industry itself, 760 billion dollars of projects is currently on hold because they’re uneconomic at 50 dollars. The industry itself lost 1.5 trillion dollars of income in the last twelve months, so if you can imagine all of that numbers coming to the industry, there have been no exploration worldwide for three years,” Aidan Heavy noted.

He added, “So you are talking about an industry that there is a massive lack of investment so the oil price cannot stay at this level, because the supply is falling off quite dramatically. So if we were pessimistic before twelve months you should be able to see that supply will not meet the world’s demand.”

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By: Vivian Kai Lokko/citifmonline.com/Ghana

The post Oil giants predict gloomy times ahead for the industry appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”anWGJl8KkpJUlPvKAFcyAFJ6RT8SDVKu”]The price of a barrel of oil yesterday December 7th, 2015,  fell below 40 dollars, the lowest since 2009.

The price of West Texas crude sank to $37.65 a barrel, a drop of 5.8%, while Brent Crude fell 5.3% to $40.73 a barrel.

The drop follows Friday’s decision by the Organization of the Petroleum Exporting Countries (OPEC) not to cut output despite the supply glut which is depressing prices.

There are fears however that the drop could worsen in the coming months and into next year as OPEC is not likely to consider its output ceiling – which had been set at 30 million barrels a day – until next June, after Iran is likely to have emerged from its sanctions regime to boost its own exports.

Projections by players in the industry on what figure to expect moving forward has been between 40 and 20 dollars a barrel.

Tough times ahead

Countries like Ghana who now rely heavily on oil revenue will be the hardest hit if the prices continue to tumble.

Since last year the country’s economy has suffered significantly following the drop in the prices of oil which pushed the finance minister Seth Terkper to review oil revenue projections.

If prices of oil continue to decline a number of infrastructure projects may be affected, also all government expenditure which rely on oil revenue for funding may be cut to suit the times.

The cedi will also be significantly affected if the prices of oil continues to decline.

An increase in revenue from oil, gold and cocoa helps boost the country foreign exchange reserves which helps tame challenges with demand and supply of foreign exchange and in turn keep the cedi stable.

Though Ghana also benefits from the drop in the price of oil on the world market because it is a net importer of the commodity its current economic challenges will only worsen if its revenue base continue to decline as two other commodities it relies on that is gold and cocoa are also not doing too well on the global market.

Likely review in 2016

Finance Minister Seth Tekper during his presentation of the 2016 budget statement in November, 2015 said government had pegged its bench mark projection for a barrel of oil at 53.05 dollars for next year in line with the International Monetary Fund (IMF)’s.

But if projections being made by industry players is anything to go by then this figure would have to be revised again.

On the positives however prices of petroleum products are expected to drop in the coming weeks following the slump in the prices of oil on the world market.

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By:  Vivian Kai Lokko/citifmonline.com/Ghana

The post Tougher days ahead for Ghana as oil prices decline globally appeared first on Citi 97.3 FM - Relevant Radio. Always.

Parliament was expected to debate and vote on the budget and programme of activities of the GNPC for the year 2015.

[contextly_sidebar id=”jWXAenE8L9rIaWvwRSd0iRmkAX9riypX”]The budget contained a proposed multi-million dollar office complex project and a research center for the corporation.

In his address on the floor of Parliament, Mr. Nitiwul questioned the timing for the budget saying it was supposed to have been approved in June 2015.

“I am looking at the committee’s report and I’m asking whether the fault is from Parliament or from GNPC. Today is third December and we are approving the programme of activity of GNPC for 2015. We have less than a month for this year to end. The minister is to lay the report, according to the law in June. Meanwhile the report we are looking at is in November,” he argued.

Dominic Nitiwul further said that; “I think we must state that GNPC’s activities are approved by Parliament before they can do anything. We are talking of people who are spending in excess of $1 billion. This is the largest single budget item, apart from the national budget. We cannot be rubber stamping this. How are we going to approve this?”

He also stated that the building for the headquarters of GNPC would not have the research center incorporated, and that “if there are other explanations why the headquarters is 16 million, the minister should let us know. And he must tell us whether that money has been spent or not.”

In his response to the statement of the Deputy Minority Leader, the Minister of Petroleum, Emmanuel Armah-Kofi Buah, explained that the budget of GNPC was presented to Parliament in January and that “I can speak on authority that the error was not GNPC’s. As I speak to you, GNPC’s report for 2016 is ready. As happened last year, the finance committee wanted to be part of the committee reviewing the GNPC report; the energy committee didn’t think that.”

The Speaker of Parliament, Edward Doe Adjaho, on his part closed the debate on the issue and deferred voting on the matter.

He further advised the leadership of the House to meet with the Energy Committee for further deliberations.

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By: Jeffrey Owuraku Sarpong/citifmonline.com/Ghana

Follow @ojsarpong

The post Minority blocks approval of GNPC budget appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”58aWEcFeZ7e9n8PYnsc2naEyGXTJotab”]The call follows what ACEP refers to as the government’s inability to disclose fully the specific sectors that benefit from the capacity building allocation of oil revenues.

 [contextly_sidebar id=”0v1ve7aLzVKT1sQHCAwZJr3X04OfjJP4″]The 2016 budget statement and economic policy stated that government spent an estimated 135 million Ghana cedis against an estimated 217 million Ghana cedis for the first nine months of 2015.

Although the details showed that commitments were made to education, Benjamin Boakye, who is Deputy Executive Director of ACEP, believes previous reports which cited some government agencies as beneficiaries shrouds the purpose for the capacity building allocation.

“Until the list came out in the 2014 petroleum report, nobody knew exactly where that capacity building money went to and when it came out, we were baffled at some of the elements that were in there including NADMO and all. I think that we can scrap the capacity building allocation and give that to education because there is no other institution that builds capacity more than the education sector” He argued.

Benjamin Boakye added, “If we have education, why don’t we say we are allocating oil revenues to that sector rather than the ambiguous capacity building term that continues to receive significant revenues and it is very difficult to track exactly what that revenue is doing.”

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By: Pius Amihere Eduku/Citifmonline.com/Ghana

The post Scrap capacity building component of oil expenditure – ACEP appeared first on Citi 97.3 FM - Relevant Radio. Always.

WAPCo[contextly_sidebar id=”gZNwfLn8XvvOVHQLLh1DtFa4iKOSCgwi”]WAPCo’s response follows earlier reports that N – Gas had cut gas supply to Ghana, hence the worsening power crisis.

According to the General Manager of WAPCo, Harriet Wereko Brobbey, N – Gas continues to supply gas to the company, which is subsequently transported to the Volta River Authority (VRA).

Speaking to Citi Business News, she said although volumes of gas from N-gas has fluctuated, the gas supplier has not cut gas to Ghana.

“We are delivering you know we are transporters, we don’t supply the gas. It is what we are supplied with that we carry to the VRA and others. So what we are required to transport is what we transport. You know the volumes go up and down depending on what we are delivering.”

“With the gas supply, you can’t say it is 90 and everyday it will be 90, its fluctuates depending on the pressure and all kinds of things and that is why when you ask about volumes; I hesitate with the volumes because it varies. But I can say that there is gas that is being delivered, General Manager of West African Gas Pipeline, Harriet Wereko Brobbey said.

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By:  Norvan Acquah – Hayford/citifmonline.com/Ghana  

The post N-Gas has not cut gas supply to Ghana-WAPCo appeared first on Citi 97.3 FM - Relevant Radio. Always.

[contextly_sidebar id=”e4NhG89CVMw5na5o81C88qWtJtgFwMiW”]The change in arrival Citi Business News has gathered follows the delay in  documentation and routine formalities at the Abidjan port where the power barge was offloaded by the Black Marlin, a speed deck cargo ship which transported the power barge from Turkey.

Information available to Citi Business News indicates that the power barge which has set sail and is being pulled by two speed boats heading to Tema Port will enter Ghanaian waters tomorrow Thursday November 26, 2015.

The barge is expected to dock at the Tema port on Saturday November 28, 2015 at around 8:00 am local time.

Upon arrival President John Dramani Mahama is expected to formally inaugurate and inspect the power barge in some 10 days.

Ghana’s power crises intensified last week after the Aboadze gas plant was shut down to enable the African Middle East Investment (AMERI) Power Plant to be connected to the Volta River Authority thermal plants at Aboadzie.

When completed the power plant will generate additional 250 MW into the National Interconnected Transmission System (NITS).

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By:  Norvan Acquah – Hayford/citifmonline.com/Ghana

The post Power barge enters Ghanaian territorial waters tomorrow appeared first on Citi 97.3 FM - Relevant Radio. Always.