The Public Interest and Accountability Committee (PIAC) has confirmed a significant cut in the Ghana National Petroleum Corporation’s (GNPC) share of petroleum revenue, reducing the allocation for its operations and institutional capacity development.
The adjustment, detailed in PIAC’s 2025 Semi-Annual Report, follows government’s fiscal consolidation agenda outlined in the 2025 Budget Statement and Economic Policy.
The report revealed that this reduction forms part of broader measures to streamline public spending and enhance transparency in petroleum revenue management.
“Petroleum revenue allocated for operations and institutional capacity development of GNPC (Level B allocation) has been reduced from 30 percent to 15 percent of net Carried and Participating Interest (CPI).”
PIAC’s 2025 Semi-Annual Report
This move marks a pivotal shift in how petroleum revenues are apportioned among statutory funds under the Petroleum Revenue Management Act, 2011 (Act 815) as amended, and signals government’s intention to wean GNPC off direct petroleum revenue support in the long term.
Breakdown of Petroleum Revenue Distribution
In the 2025 Budget Statement and Economic Policy, total projected petroleum revenue was estimated at US$1.01 billion.
Based on the allocation formula, GNPC was projected to receive US$192.67 million to cover both Levels A and B expenditures. Level A supports the Corporation’s financing of government equity in producing oilfields, while Level B funds its operations and capacity development.
The report further noted that the ABFA was projected to receive US$573.08 million, representing 70 percent of the net benchmark revenue of US$818.69 million, while the Ghana Petroleum Funds were to receive US$245.61 million, equivalent to 30 percent of the net benchmark revenue.
Of this amount, US$171.93 million (70 percent) would go to the Ghana Stabilisation Fund (GSF) and US$73.68 million (30 percent) to the Ghana Heritage Fund (GHF).
For the first half of 2025, “the Bank of Ghana reported total receipts of US$370.62 million into the Petroleum Holding Fund, representing 36.65 percent of the benchmark revenue for the year.” This figure is also equivalent to 44.08 percent of receipts into the PHF during the same period in 2024.
Consistent with the Act, these receipts were distributed quarterly to GNPC, the ABFA, and the two Petroleum Funds.
The GNPC received US$65.26 million during the reporting period, representing 33.87 percent of its projected annual allocation and 57.09 percent of what it received during the same period in 2024.
Rationale for the Reduction
PIAC’s report indicates that the government sought parliamentary approval to reduce GNPC’s Level B allocation as part of efforts to restore fiscal balance and reassert control over earmarked funds.
The decision aligns with the Earmarked Funds Capping and Realignment Act, 2017 (Act 947), which places limits on statutory funds to make additional resources available for government programmes.
While some analysts and civil society groups have long questioned GNPC’s expenditure patterns, the Committee acknowledged the mixed implications of the government’s move.
Over the past five years, an average of 24.62 percent of GNPC’s Level B spending reportedly went to Sustainability, Stakeholder Relations, and the GNPC Foundation—areas that critics argue fall outside the company’s core technical mandate.
Industry observers are expected to welcome the cut as a corrective measure against perceived inefficiencies. However, PIAC cautioned that the broader impact must be viewed within the context of global trends.
The report noted, “Many investors are redirecting their capital away from fossil fuel business,” adding that other governments have strengthened their national oil companies’ financial and technological capacities to maintain competitiveness amid the global energy transition.
Preparing GNPC for the Future
The report further points out that the framers of the Petroleum Revenue Management Act envisaged a future in which GNPC would become financially self-sufficient. The Act stipulates that Level B allocations should not exceed a 15-year period beginning in 2011, a clause that effectively expires in 2026.
“This means that the framers of the Act expected GNPC to be weaned of petroleum revenues at a point as it will have built financial muscle to play leadership role in the sector.”
PIAC’s 2025 Semi-Annual Report
In line with this expectation, the Ghana National Petroleum Corporation Law, 1983 (PNDCL 64), mandates GNPC to establish and maintain a reserve fund to finance its long-term plans and ensure financial sustainability.
PIAC’s 2025 Semi-Annual Report therefore underscores the dual challenge facing GNPC: balancing immediate fiscal pressures with the long-term need to strengthen its technical and financial capacity amid shifting global energy dynamics.
As the country navigates its fiscal and energy transition pathways, the debate over GNPC’s funding will likely remain central to Ghana’s petroleum management discourse, a reflection of the delicate balance between fiscal prudence, national development, and strategic investment in the country’s energy future.
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