Maputo — The South African petrochemical giant Sasol has denied allegations that it has vastly inflated the recoverable costs in its oil and gas operations in Mozambique.

The preliminary results from an audit ordered by the Mozambican government showed that Sasol declared recoverable costs of 148.7 million dollars for its operations in the southern province of Inhambane in the 2017 financial year.

It was the same story for 2018: Sasol claimed recoverable costs of 114.4 million dollars, but the government auditors calculated that 49.3 million dollars of this sum was not eligible.

So taking the two years together, Sasol had overstated its recoverable costs by 99.8 million dollars, which has significant implications for the amount of tax it should be paying to the Mozambican state, since recoverable costs are deducted from tax payments.

"As the operator of the PSA, Sasol ensures that all costs are correctly accounted for, under the terms of the agreement between the shareholders and the Mozambican government".