According to projections by the Executive Director of the African Centre for Energy Policy (ACEP), Mr. Benjamin Boakye, the Bulk Oil Storage and Transportation Company Limited (BOST) in Ghana is expected to face potential losses under the government’s gold for oil policy.
Mr. Boakye has raised concerns about the import cost of fuel under the policy, which he argues is higher than the cost at which Bulk Distribution Companies (BDCs) in the country purchase fuel from BOST under the programme. As a result, he disclosed that BDCs are likely to undercut prices from BOST, causing losses for the company.
These assertions come amidst an anticipated decline in fuel prices at the pumps, expected to range between 3% and 10% starting from today, March 16, 2023.
However, Mr. Boakye has argued that the decline in fuel prices is not due to the government’s gold for oil policy. Instead, he attributed it to the reduction in oil prices on the international market, with Brent and WTI falling to $73 and $66 per barrel respectively, adding that: “the relative stability in the cedi supports the decline in fuel prices.”
The Executive director’s statement contradicts that of the Vice President of Ghana – Dr. Mahamudu Bawumia, who claims that the anticipated decline in fuel prices is due to the government’s gold for oil policy, which he further asserts that, will result in foreign exchange earnings of over $4.8bn for the country.
Call On Government To Analyze Policy’s Impact On BOST And Economy
The potential losses for BOST and the contradicting statements from Mr. Boakye and Dr. Bawumia raise concerns about the impact of the gold for oil policy on the Ghanaian economy. While the policy aims to boost foreign exchange earnings for the country, Mr. Boakye has averred that it is essential to consider the impact on BOST’s financial viability and the potential implications for Ghana’s fuel prices.
Moreover, government has been urged by industry experts to conduct thorough analyses to determine the best approach for balancing the country’s economic goals and BOST’s financial sustainability.
These analyses, according to industry experts, should include the impact of the policy on BOST’s operational costs and the potential competition from BDCs.
Additionally, government has been encouraged to consider exploring alternative ways of boosting foreign exchange earnings, such as diversifying the country’s export base or investing in other sectors.
As Ghana seeks to advance its economic growth and development, it is crucial to have a comprehensive understanding of the implications of policy decisions on the country’s industries and economy as a whole. Only then can the government make informed decisions that balance the interests of all stakeholders and foster sustainable economic growth.
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