Ghana’s domestic oil importers threatened to take legal action against the government to recover interest on a $384m debt, Reuters reported.
The African state’s cedi currency witnessed a significant decline in its value, halving against the US dollar between 2013 and 2015. This has hit importers who buy oil products on international markets in dollars but sell them in cedis to consumers at home, informed Hydrocarbon Processing.
The gap between the contract price the government pays importers and the lower sale price set by the National Petroleum Authority left the importers short due to the slump in the currency’s value. In turn, the Chamber of Bulk Oil Distributors stated in December 2016 that “the continuous delay in payment has piled an unbearable financing cost.” The Chamber’s Chief Executive, Senyo Hosi, said: “We will initiate steps, legal action not excluded, to engage GoG (government) on the payment of interest on the verified claims.”
The debt stands at around 1% of gross domestic product, and is considered a problem for banks due to the nonperforming loans that were provided for oil companies on the basis of contract price, and had yet to be repaid in full.
In late December 2016, Ghana has been striding forward to meet growing demand on natural gas by beginning the construction of a $552m power plant project, and has finalized a deal to build an LNG terminal.