Edwin Alfred Provencal, Managing Director of Bulk Oil Storage and Transportation Company (BOST), has announced the arrival of four (4) cargoes of gasoline (petrol) and gasoil (diesel) under government of Ghana’s ‘Gold for Oil’ programme beginning this weekend.
Providing a concise breakdown of how the fuel consignment is going to arrive, the Managing Director of BOST said that the first badge, specifically, one cargo of gasoline (petrol) will land on Ghana’s shores this weekend.
Two cargoes of gasoil (diesel) will also arrive after which another cargo of gasoline (petrol) will follow, Edwin noted.
Mr. Provencal expects that the arrival of the gasoline and gasoil cargoes in the West African nation’s port will cause petrol prices to trip by at least Gh¢1 at the pump during the next pricing window.
The country is expecting four consignments in February under the gold for oil policy and this will drive prices of petroleum products down, Edwin Provencal said.
The price of diesel would also fall further by around 50 pesewas, the Managing Director of BOST added.
Assuringly, Mr. Provencal indicated that the BOST is working with the National Petroleum Authority (NPA) to increase these consignments so as to keep prices minimal and consumption better at the pump.
“I can tell you for a fact that we’re working on the pricing with NPA and we should expect Gh¢1 reduction at the pump for gasoline.”
Mr. Provencal
According to Provencal, the government’s gold for oil policy promises to bring BOST the needed credibility in the marketplace in the long term.
The policy will also help BOST to solve some challenges in relation to building a strategic reserve of stocks of petroleum products for the country, Provencal further indicated.
Recalling, 41,000 metric tons of diesel arrived last month, under government’s gold for oil programme.
“We are also mandated to build a strategic reserve of stocks of petroleum products to meet a minimum of six weeks of national consumption … this we haven’t done too well for obvious reasons. This is because we didn’t have the men and the money. Hopefully, this programme (gold for oil) will help us solve some of these challenges in the long term.”
Mr. Provencal
The government introduced the gold for oil programme as part of measures to stem the tide of fuel prices and depreciation of the Ghanaian cedis.
Last week, GOIL and Shell reduced the price of diesel, with GOIL reducing it by 50 pesewas while Shell reduced it by 45 pesewas. This reduction was attributed to the gold for oil programme.
Meanwhile, several industry players have criticised the programme, citing a lack of transparency.
‘Gold for Oil’ to address cedi’s depreciation and improve BoP
Dr. Mahamudu Bawumia,Vice President of Ghana said the gold for oil policy was intended to solve the country’s dwindling foreign currency reserves problem as well as demand for dollars by oil importers, which has been weakening the cedi and increasing the cost of living.
“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency.”
Dr.Bawumia
Even more so, using gold would prevent the exchange rate from having a direct impact on fuel or utility prices, as domestic sellers would no longer need foreign exchange to import oil products, Dr. Bawumia added.
In November 2022, the Government of Ghana, through the Vice-President, announced plans to buy oil products with gold rather than US dollars.
Following the deal, the first consignment of oil under Ghana’s ‘Gold for Oil’ policy arrived last month, January 2023, from the United Arab Emirates (UAE).
