Dr Mohammed Amin Adam, Deputy Energy Minister, has disclosed that the government is ready to implement its gold-for-oil barter deal.

According to him, the country has enough gold in its reservior to exchange for oil in order to reduce the current increasing of prices of fuel.

Government on Thursday November 24, 2022, revealed that it is negotiating a gold-for-oil barter deal to address the country’s “dwindling foreign exchange reserves” to procure oil products.

Since Vice President, His Exellency Dr Mahamudu Bawumia announced this, many have wondered if the necessary consultation have been held.

But addressing the issue in an interview, Dr Adam said that prior to the announcement of this new policy, government had engaged all relevant stakeholders.

“Gold mobilisation and gold purchases are everyday activities. And so we have looked at the market and the Bank of Ghana is already buying gold and they are able to do 50,000 ounces of gold a month. The Precious Mining Company (PMC) also purchase gold from small-scale miners and they are able to buy 160,00 ounces every month. And what we need is 205,000 a month.

“And so if you look at our oil bill vis-à-vis the worth of the gold we are able to mobilize monthly, there is no doubt that we’ll be able to get the required gold to exchange for the requirement of our petroleum products and so we are very confident that this is a policy we can implement without difficulties.”
Dr Amin Adam

Dr Adam disclosed that the government has been engaging the Bank of Ghana and also been talking to oil suppliers.“We have also been engaging gold refiners and brokers,” he said.

“And so extensive discussions and engagements have taken place over the last one month and this is why at this point we can implement that policy, hence, the announcement.”
Mr Adam

Government’s Negotiation

Vice President, Dr Mahamudu Bawumia disclosed this on his Facebook page saying, “The barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since its independence.”

The second gentleman of the land noted that the government expects “this new framework to be fully operational by the end of the first quarter of 2023.”

The Vice President stated that,“To address this challenge, government is negotiating a new policy regime where our gold (rather than our US dollar reserves) will be used to buy oil products”.

The the past few month, there has been a hike in petroleum products including diesel and petrol. The price of diesel went up to more than GH¢23, while the price of petrol shored up to GH¢18.

The Executive Secretary of the Chamber of Petroleum Consumers (COPEC), Mr Duncan Amoah indicated, that the rise is due to the increase in taxes on petrol to around 422% within the year.

Mr Amoah noted that the National Petroleum Authority (NPA) should not be blamed for the increase in prices; instead, he believes it is due to mismanagement by the government.

The Executive Secretary, therefore, advised the government to minimise the increase in petroleum taxes, saying it may lead to the loss of jobs in the petroleum sector.