Former Finance Minister, Seth Terkper, says the reason why the government is unable to pay subsidies on petroleum products or reduce petroleum products is because the monies for the subsidies have been collateralized.
Government established the Energy Sector Levies Act (ESLA) 2015, Act 899, as amended, to consolidate levies collected under the sector, provide funding for power generation and the clearance of legacy debts accumulated within the sector.
This was to support road maintenance, provide funding for the regulation, management, development and utilisation of sustainable energy resources under the Energy Commission, provide funding for investments in public lighting and the National Electrification Programme, and subsidise Premix and Residual Fuel Oil.
According to Seth Terkper following the collateralization of the ESLA the monies are no longer available to be used for its intended purposes.
He said, “Prof the reason why the government cannot pay subsidy or it cannot reduce taxes are simple. The monies for the subsidy has been collateralized as part of ESLA; because we had built that money, that’s the Price Stabilisation Levy, part of it was used to pay the outstanding subsidy and then we started the strategic stocks with TOR bond.
“Today as we speak that money is not available, it’s been collateralized for the ESLA bond. What did we do with that money?
“The second element is that why are you not able to reduce those taxes and the rest? Much of the much of the energy sector levies are in ESLA, that is what ESLA is all about which was meant to pay down road and others, right, so if you remove them, where are you going to get the money to service the ESLA bond?” he said on PM Express Thursday.
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