Major Daniel Sowah Ablorh-Quarcoo (Rtd), Chairman, Public Interest and Accountability Committee (PIAC) has said the drop in the global price of oil would have serious impact on Government revenue thereby compromising its ability to finance its budget for 2015 and beyond.

He intimated that although Ghana is not a major oil producing country, petroleum revenue had been a key contributor to the Gross Domestic Product (GDP) and a major source of revenue since oil production began in Ghana.

Major Ablorh-Quarcoo said this on Wednesday, during the opening of a panel discussion dubbed “The Falling Oil Prices and its Impact on Petroleum Revenues and the National Budget”.

He said global crude prices had been plummeting since the second half of 2014 with prices dropping from around $110 a barrel in June 2014 to below $50 a barrel in January 2015, the lowest since March 2009.

“Industry experts have attributed the tumbling of crude oil prices to the determination of OPEC not to cut production as a way to push down prices, the rise of US shale oil production and the returning of Libyan oil unto the market”, he said.

He said the drop in crude oil prices presented a big challenge to the major oil exporting nations as it was expected that growth in some of these countries could shrink between 0.8 and 2.5 percentage points.

“Furthermore the price slowdown would certainly compound fiscal revenue losses in oil exporting countries”, he said.

He drew the general conclusion that the decline in crude price should in principle have an overall positive impact on the Ghanaian economy since Ghana is a net-importer of oil (still imports oil).

“However the country may not be able to take full advantage of the situation due to various other challenges that it is facing”, he said.

The panel discussion, which attracted participants from the Bank of Ghana, the Ghana National Petroleum Corporation, the Ministry of Finance and the African Centre for Energy Policy were held behind closed doors.