The Auditor General has brought to light a revenue loss exceeding $8.3 million resulting from the failure to impose penalties on oil companies for delayed payment of surface rental.
The Auditor General's report emphasized that companies defaulting on payment were not being subjected to the required penalties as stipulated in the Petroleum Revenue Management Act, 2011 (Act 815), Section 3.
According to the Act, entities failing to pay on time should face a supplementary penalty of either five percent of the original amount for each day of default or the rate specified by other laws, whichever is higher.
The disclosed information was part of the Auditor-General's report covering petroleum funds management during the period from January 1, 2022, to December 31, 2022.
The report unveiled that as of the end of 2022, a total of $2.8 million remained outstanding in surface rentals, accounting for 80 percent of projected receipts for that year.
Significantly, $1.8 million of the pending sum was attributed to four contractors whose Petroleum Agreements were terminated by the Minister of Energy.
These measures encompass requesting bank guarantees from prospecting companies and conducting comprehensive due diligence and Know Your Client (KYC) assessments for entities involved in oil-related activities.
Additionally, the report advised the Petroleum Commission and GRA to levy surcharges on defaulting companies in accordance with the provisions of Section 3 of the PRMA 2011 (Act 815).
In response to the report, the GRA confirmed the initiation of enforcement measures, including issuing Demand Notices to non-compliant companies.
The Petroleum Commission also asserted its commitment to withholding approvals from non-compliant contractors and aiding the GRA in assessing and collecting penalty charges.