The deputy Energy Minister, Andrew Egyapa Mercer, has confirmed that the initial consignment of 40,000 tons of oil brought into the country under the Gold-for-oil policy, was purchased with cash instead of gold.
The private company, LITASCO, has been mentioned on the corridors of power as involved in the lifting.
The company has been linked to the ruling family and its cronies. It has been an active player in the energy sector and over the years, being linked to one Hans Djaba, a friend of Edward Akufo-Addo alias “Bumpty”, a younger brother of President Nana Akufo-Addo.
Andrew Egyapa Mercer’s disclosure, comes after several calls by industry experts such as the Institute of Energy Securities and COPEC for the government to disclose the quantity of gold it exchanged for the 40,000 metric tons of fuel, as they raised questions over the viability of the deal.
Recently, Former Chief Executive Officer (CEO) of the Ghana National Petroleum Corporation (GNPC), said he was concerned that some persons in the Akufo-Addo government are using the gold for oil deal as a means to enrich themselves.
Alex Mould, wanted to know the owners of LITASCO in Ghana, while demanding that the bidding process it is participating in, be opened and made public and transparent for all to appreciate.
“Who represents LITASCO in Ghana? And, who is the beneficial representative?” he quizzed, adding “the first 41,000 metric tons (tonnes or MT) of petroleum products imported was brought in by LITASCO. On this first G4O cargo contract, did it go through a public procurement bidding process? Was it open and transparent?
The Herald’s sources, have hinted that the government is dealing with banned Russian oil companies, adding this could open the country to international sanctions.
Last week, former President John Dramani Mahama, called on the government to immediately put before Parliament, the Gold for Oil agreement for parliamentary scrutiny and approval.
He said putting before Parliament the gold oil swap deal, was the most appropriate thing to do since the deal was an international financial transaction.
“According to the 1992 Constitution of Ghana, international financial transactions require the approval of Parliament, it does not matter that the Gold for Oil deal is a barter trade,” he said
The Minority in Parliament, also questioned the feasibility of the policy, arguing that it won’t affect the current prices at the pumps.
Speaking to Citi News, Mr Mercer, said the companies they dealt with initially did not have the capacity to exchange gold for oil.
“The policy actually started with an intent to do strict barter for gold and petroleum products, but it became apparent that any of the international oil trading companies that do not have a commodity wing to deal with gold on their behalf, will be excluded from the policy.
“We developed the policy such that we were operating two streams, one was direct barter and the second was monetising the gold, so we can pay for IOTs that were not other commodity focused, but solely petroleum products…so the test run that we did was actually paid through the second route.”
Despite countless claims by Vice President Dr Mahamudu Bawumia that the gold for oil policy, will reduce the pressure on forex and also present the country with cheaper fuel, fuel products have been increased twice since Ghana took delivery of the 40,000 tons of oil.
Speaking at this year’s New Year School, Dr Bawumia, said the gold for oil policy is the best for the country looking at the current economic challenges.
“…Ghana took delivery of its first cargo under the gold for oil policy. This is our test cargo, it is the cargo to test the framework if everything that has been put in place will work, by the grace of God the Framework will work and if that should happen we are going to save a lot of foreign exchange and reduce the pressure on our currency.”
The Member of Parliament (MP) for Yapei KusawguCconstituency, John Jinapor, had predicted earlier that the country was heading for a debt crisis out of the gold for oil deal.
The legislator, described the deal by the government “as a lazy man’s approach, because gold, first of all, needs to be expressed in its monetary value. You can’t just say take an ounce of gold and give me a barrel of oil, as it used to be in the real barter that you are talking about. You must first of all, value that gold in dollar terms, and that is the function of currency or money”.
The Executive Secretary of the Chamber of Petroleum Consumers Ghana (COPEC), Duncan Amoah, has also charged the government to spell out the nitty-gritty of the gold-for-oil policy to Ghanaians.
He said, the policy seems dead on arrival because the oil delivered seems not to have any impact on pump prices as it keep increasing.
His call comes on the back of confirmation by the deputy Energy Minister, Andrew Egyapa Mercer, that the initial consignment of 40,000 tons of oil brought into the country under the policy was purchased with cash and not gold.
Speaking to Citi News, Mr Amoah, advised government to come clean on the policy after it turned out that it paid cash for the oil, urging government to halt the policy and concentrate on fixing the cedi.
“I think after this revelation, the ministry of energy, ministry of finance, Bank of Ghana, government itself should come clean and tell Ghanaians that, look we are going to use your public funds to now go into the realm or arena of forex trading… We do think that whatever details or the nitty-gritty of the gold-for-oil policy should be communicated so that we all depart from this gold-for-oil mantra and deal with the reality of the issue,” the Executive Secretary of COPEC asserted.
He added that “they need to give details so that we can all interrogate the issue, and not hide behind we are going to buy forex for the local market…only for it to turn out to be a fiasco, a lie, then I think that they have not treated all of us fairly. The gold-for-oil policy seems dead on arrival because the cargo that was delivered seemed not to have had any impact on pump prices. I think they should halt or end this dangerous expedition and go back to fixing the cedi”.
He asked why the government failed to auction dollars to the Bulk Oil Distribution Companies (BDCs).
“If you tell us gold-for-oil is a shield for forex so that the BDCs’ demand for forex and the pressure it puts on the cedi goes down, and it ends up that we rather took dollar, real cash from here to now go and import, shouldn’t you have auctioned the dollars to the private firms to reduce the pressure that the BDCs are facing as opposing to this dangerous transaction?” Mr. Amoah questioned.
Mr Mahama, was speaking at a forum in London attended by members of the UK & Ireland Chapter NDC.
President Mahama, cited the Sinohydro agreement that exchanges the country’s bauxite for infrastructure development by China as a classic example of barter trade.
He further explained that if the Sinohydro agreement was a barter deal and went to Parliament for approval because it was an international financial transaction, why not the current deal in which Ghana’s gold was being exchanged for oil.
The former President noted that the deal was currently shrouded in complete secrecy since only government officials, who were involved in the transaction, knew the details, describing the development as unacceptable.
“There is a complete lack of transparency about the transaction, and that is one of the major problems with this government. They hide everything and do as they please”, he noted.
Mr Mahama explained that with parliamentary scrutiny, Ghanaians would have value for money in the gold for oil deal.
He said such scrutiny would also help the public to know the beneficial owners behind the transaction.
