The Auditor-General has instructed the Petroleum Commission (PC) and the Ghana Revenue Authority (GRA) to strictly enforce statutory penalties against International Oil Companies (IOCs) that default on the timely payment of surface rental fees, warning that persistent non-compliance is undermining petroleum revenue mobilisation and exposing weaknesses in the enforcement of Ghana’s upstream fiscal framework.

The directive follows findings contained in the Auditor-General’s report on the management of petroleum funds covering the period from January 1 to December 31, 2024. The report revealed that several operators delayed or failed to pay mandatory surface rental fees into the Petroleum Holding Fund (PHF), despite clear legal timelines and penalty provisions under existing petroleum revenue laws.

Under Regulation 5 of the Petroleum Revenue Management Regulations, 2019 (L.I. 2381), petroleum operators are required to self-assess their annual surface rental obligations and pay the amounts due into the PHF by February 28 each year. For newly ratified petroleum agreements, payments must be made within 60 days of ratification.

The Auditor-General noted that failure to comply with these requirements disrupts predictability in petroleum revenue flows and weakens fiscal planning.

The law provides explicit sanctions for default. Section 3 of the Petroleum Revenue Management Act, 2011 (Act 815) mandates that entities that miss payment deadlines are liable to a penalty of five per cent of the outstanding amount for each day of default, or any higher rate prescribed under other applicable legislation.

However, the report observed that these penalties have largely not been enforced, significantly reducing the deterrent effect intended by the law.

Based on these findings, the Auditor-General has urged both the Petroleum Commission and the GRA to move beyond administrative oversight and actively apply penalties against defaulting companies to protect state revenues.

The report further disclosed that total estimated surface rental proceeds at the end of the reporting period stood at US$3.46 million, comprising US$721,585 for the 2024 financial year and about US$2 million in arrears from previous years.

Despite this, only US$512,711.08 was paid into the Petroleum Holding Fund, underscoring a growing gap between expected petroleum revenues and actual collections.