NPA Dreaming Yet Another SML-like Contract In Petroleum Downstream Sector?

Even before the controversy and public outcry relative to the revenue assurance contract between the Ghana Revenue Authority (GRA) and Strategy Mobilization Limited (SML) dies down, incontrovertible evidence stumbled upon suggests the National Petroleum Authority (NPA) plans to contract an entity to provide a similar exercise.

Activists in the petroleum sector are at a loss why the NPA is engaging another firm for a similar exercise when it had indicated to the KPMG audit that it was already undertaking revenue assurance before SML was brought in; thereby raising issues of duplication of duties.

Documents available to JoyNews pointed to a meeting scheduled for Thursday, May 23, 2024, inviting some selected stakeholders to a presentation by a company named HFILED Limited to update on an end-to-end primary supply assurance and management systems.

Contents of the letter addressed to the Ghana Revenue Authority (GRA), the Assistant Commissioner of Petroleum, Customs Division Tema, Bulk Oil Distributors, the Association of Bankers, and others indicate the meeting seeks to provide end-to-end primary supply assurance and management system for the petroleum downstream.

The technology aims to provide a tailored solution to meet the needs of all stakeholders in terms of ensuring visibility and supplies of petroleum products into the country including stock monitoring and management as well as addressing risks associated with the supply, trading and financing of petroleum products, the invitations explains.

It will be recalled that President Akufo-Addo last month instructed the Ghana Revenue Authority (GRA) and the Ministry of Finance to renegotiate the revenue assurance contract with Strategic Mobilisation Limited (SML).

The President emphasised that the renegotiation should be closely monitored and evaluated periodically to ensure it meets expectations.

The decision to renegotiate the contract follows the President's acceptance of the recommendation by KPMG after its audit into the deal.

The audit findings prompted the need for a review of the revenue assurance contract, highlighting areas where improvements are necessary to enhance its effectiveness.

President's Comment on KPMG Report

"There is a clear need for the downstream petroleum audit services provided by SML. GRA and the State have benefited from these services since SML commenced providing them. There has been an increase in volumes of 1.7 billion litres and an increase in tax revenue to the State of GHS 2.45 billion.


"KPMG also observed that there were qualitative benefits, including a 24/7 electronic real-time monitoring of outflow and partial monitoring of inflows of petroleum products at depots where SML had installed flowmeters and six levels of reconciliation done by SML."

"This minimizes the occurrence of under-declarations. However, it is important to review the contract for downstream petroleum audit services, particularly the fee structure. Given the experience and proficiency of SML over the last four years of providing this service, the President has directed that the fee structure be changed from a variable to a fixed fee structure. Other provisions of the contract worth reviewing include clauses on intellectual property rights, termination, and service delivery expectations," a statement from the Presidency said.

The interest of industry players are piqued and crossed fingers awaiting exactly what the National Petroleum Authority (NPA) will be asking this new entity to do in relation to the supply assurance and management systems in the petroleum downstream sector, which hitherto was the task of SML.