The Gold for Oil (G40) plan, according to the National Petroleum Authority (NPA), will supply 50% of the nation‘s oil needs by March 2023.
The NPA claims that this will result in cheaper ex-pump prices across the nation.
The NPA said in a statement released yesterday in Accra that it would collaborate with the Bulk Oil Storage and Transportation Company Limited (BOST) to negotiate prices with the world’s oil traders in order to guarantee that the landed cost of goods purchased through the program always complies with competitive standards.
The statement said all Bulk Import, Distribution, and Export Companies (BIDECs) and Oil Marketing Companies who wish to purchase products under the G4O programme would be required to sign off an undertaking confirming their willingness to comply with the terms and conditions for partaking in the purchase and sale of G4O products.
The implementation of the government’s G4O programme which commenced with the arrival of the first consignment of about 40,000 metric tonnes of diesel on January 15, 2023, valued at about US$40 million.
The first consignment of 40,000 metric tonnes of diesel, the statement explained constituted about 10 per cent of the country’s combined monthly demand for petrol and diesel and is expected to gradually increase imports under G4O to constitute about 50 per cent of the country’s total demand of petrol and diesel by March 2023.
It said the prime objective of the programme was to use additional foreign exchange resources from the Bank of Ghana’s Domestic Gold Purchase (DGP) programme to provide foreign currency for the importation of petroleum products for the country which currently stands at about US$350 million per month.
The statement stated that the implementation of the G4O would ease pressure on the dollar (the currency used for the importation of petroleum products) and avoid the occasional increases in petroleum prices resulting from the depreciation of the cedi against the dollar.
It said the programme would ensure that the cost of importing the products from international oil traders would be comparatively cheaper, adding “payment for oil supply is to be done in two channels by way of barter trade where gold is exchanged for oil or via broker channel where the gold is converted into cash and paid to the supplier.”
The statement said the consequent reduction in foreign exchange pressures and premiums charged by international oil traders as well as efficiency gains from the value chain would lead to lower ex-pump prices in the country.
The NPA explained that “all these would ensure that the price of petroleum products imported under the G4O programme reflects at the pumps to benefit the consumer, the National Petroleum Authority (NPA) will regulate the prices of the products in the interim until the volumes increase significantly.”
“The price at which BOST will sell the products to bulk import, distribution, and export companies (BIDECs) will be approved by the NPA and the price at which the BIDECs will sell the products to oil marketing companies (OMCs) will also be approved by the NPA,” it added.