The National Petroleum Authority (NPA) has underscored the significant impact of the government’s flagship Gold for Oil Policy in ensuring security of fuel supply in Ghana.
Head of Planning at the National Petroleum Authority, Mr. Dominic Aboagye, in a media interview said the policy has been impactful, stating prices of petroleum products over the period has been quite stable.
“Look at last year where prices were but now you can see how prices have been quite stable at a certain figure around 11, 12 cedis, we’ve seen stock levels increased” he added.
According to him, at the beginning of the invasion of Ukraine by Russia, the country’s stock had dropped but argued that the inception of the policy has triggered some form of competition among various international suppliers.
Mr. Aboagya further explained that the gold for oil arrangement sort of de-risk the Ghana markings and so a lot of international suppliers then saw the opportunity in doing business with Ghana because the risk had been mitigated and emphasized this has consequently increased supplies to the country.
The NPA Head of Planning disclosed this to Journalists in Tamale on Wednesday, July 19, on the sidelines of a day’s capacity building program on Fuel Supply and Availability in Ghana.
“…Yes indeed, the Russia invasion of Ukraine poses a geopolitical risk to fuel supply to Ghana. As I indicated in my presentation, Ghana finds itself in an import situation where we import most of the petroleum products consumed in the country. In fact, the region where we predominantly get our products from is Europe. Europe is also a continent that sources a lot of its products from Russia and so with the invasion and the sanctions that were imposed on Russia obviously was going to posed a threat to supply to Europe and it would have a ripple effect on countries in Africa like Ghana” he stated.
Meanwhile, beside the gold for oil policy, Mr. Aboagye indicated the NPA in collaboration with the Ministry of Energy and Ministry of Finance introduced the Special Forex Auction by the Bank of Ghana to provide forex to the energy market to sustain supply to the country.
“A number of actions and interventions have been made just to ensure the country continuous to have a sustained supply of fuel.”
Background
The Vice President, Dr Mahamudu Bawumia in 2022 announced a new government policy christened Gold for Oil (G4O).
The policy, as explained by the government, is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the Central Bank.
The move, was announced by the Vice President in the midst of the depreciation of the cedi against the US dollar and the rising cost of fuel prices, was explained as an intervention to help stabilise prices of fuel products, as well as reduce pressure on Ghana’s foreign exchange, as the direct gold barter would be the mode of paying for imported oil instead of depleting the foreign exchange reserve.
