The Central Bank of Ghana (BoG) has attributed the recent and future decline of fuel prices in the country to the government’s gold-for-oil policy.
According to Mr. Stephen Opata – the Director of Financial Marketing at the BoG, the policy has played a significant role in the almost 50% reduction in ex-pump prices.
In addition to the fall in international prices of fuel, he said, the gold-for-oil policy has helped the country contract fuel at competitive prices, resulting in cheaper prices at the pump for consumers.
According to BoG’s financial marketing expert, the gold-for-oil policy, which was introduced by the government in 2018, aims to use the country’s gold reserves to secure oil supplies from partner countries, noting that: “The policy will allow the country to trade its gold reserves directly for oil, which helps to reduce the cost of fuel imports.”
Ghana, which is a net importer of petroleum products, has been grappling with high fuel prices, which have contributed to inflation and increased the cost of living for consumers.
Mr. Opata’s remarks come ahead of an anticipated reduction in fuel prices between 2% and 9% on April 1, 2023. This will be the second consecutive reduction in fuel prices, following a reduction of 3% to 10% in the second pricing window of March 2023.
The government’s gold-for-oil policy has been lauded as a step in the right direction towards reducing the country’s reliance on foreign currency to pay for fuel imports. The policy has also helped to stabilize the country’s currency and the cedi by reducing the demand for foreign currency.
Fuel Prices To Fall Between 2% And 9% From April 1
It can be recalled that the Institute for Energy Security (IES) disclosed a projected decline in LPG by about 9%, whilst petrol and diesel will witness between 2% and 5% drop on April 1, 2023.
Unlike Mr. Opata’s case for fuel drop down, the Executive Director of the Institute for Energy Security, Nana Amoasi VII attributed the forecasted decline to the stability of the cedi to the dollar and the easing of prices of finished products on the world market.
“Fuel consumers must expect another round of fuel price drops in the coming days. The imminent price drop is a reflection of happenings on the world fuel market over the past two weeks which shows decline in prices of gasoline [petrol], Liquefied Petroleum Gas and some other finished products.
“In the last 14 days, the price of gasoline [petrol] on the world market posted a drop of $21 per metric tonne. Gasoil [diesel] also dropped by roughly 3.6% from the previous price of $813 per metric tonne.”
Nana Amoasi VII
The Executive Director also revealed that LPG is the product that posted the biggest drop in price over the last two weeks on the world market. The commodity’s price fell by a whopping $95 per metric tonne, about 15% drop.
Nana Amoasi VII urged Ghanaians to expect some relieve from the high fuel prices recorded in the past six months, noting “households that rely on LPG will be the most beneficiaries as the commodity may post a hefty drop in prices in the coming days.”
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