The Chamber of Bulk Oil Distributors (CBOD) has strongly opposed the government’s plan to make the Bulk Energy Storage and Transportation Company (BEST) formerly known as Bulk Oil Storage and Transportation Company (BOST), the sole off-taker of Sentuo Oil Refinery Limited’s production under the Gold for Oil (G4O) programme.
The CBOD believes that this plan contradicts the deregulation policy that guides the petroleum downstream sector and could create market challenges and deficiencies in the medium- to long term.
“We object to this proposal and respectfully appeal to the Head of the Economic Management Team (EMT), The Vice President, Dr. Alhaji Mahamadu Bawumia, to review this proposal. Providing the needed USD liquidity under the G40
programme can still be achieved without necessarily anchoring the entire output of Sentuo Oil Refinery Limited (SORL) with BEST, formerly known as Bulk Oil Storage and Transportation Company (BOST),” a statement from CBOD dated April 25, 2024, read.
According to the CBOD, the government’s aim to control the exchange rate by indirectly ceding Sentuo Oil Refinery’s cedi liquidity through BEST for managing USD allocations under the G4O program is not justified.
The CBOD emphasizes that this proposal would stifle competition and hinder the growth of a vibrant private sector within the downstream sector.
The distributors have therefore urged the government to reconsider this position and establish a framework that encourages active participation for all players, including BEST, Bulk Oil Import, Distribution, and Export Companies (BIDECs), and all private participants within the downstream value chain.
The CBOD has, however, noted that it remains committed to working with the government to develop a workable G4O framework that fosters fair market practices and transparency while promoting innovation, sustainability, and an efficient downstream petroleum sector in Ghana.
The G4O policy allows for payment for imported oil products with gold, either through barter trade or via forex obtained from selling gold to a broker.
Under the Barter Channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana (BoG). Under the Broker Channel, the BoG sells gold to a gold broker, which provides forex cover to pay for petroleum products.
