The Herald has picked up reports of the arrival of a fresh consignment of petroleum products under the government’s Gold For Oil Policy, later today.
The quantity expected is not yet known but insiders have assured that the oil cargo will arrive today.
It is expected that this arrival and subsequent ones to follow will lead to a fall in prices of petroleum products soon.
This comes as the Association of Oil Marketing Companies (AOMC) is calling on the government to introduce a fair and balanced mechanism to distribute the fuel brought under the Gold For Oil Policy to avoid any form of discrimination and ensure fairness to all licensed parties.
The association noted that the current mechanism allows for arbitrary selection of BIDECs, and by extension OMCs, to benefit from the programme.
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AOMC in a statement also noted that the fact that this mechanism is intended to force players to reduce prices at the pumps creates some form of arbitrariness which will eventually distort the market and create an uneven playing field.
This comes on the back of the government’s revelation that only a few OMCs reduced the prices of fuel at the pumps when the first consignment was delivered.
A statement issued by the Association notes that a discussion of the implementation of this innovation and any others in the industry with all stakeholders will go a long way to ensure the success of the program.
Government had suggested that its Gold for Oil (G4O) Programme is a clever move to control the USD350 million which leaves the shores of Ghana for the importation of petroleum products for the country affecting the most basic commodity on the shelves.
The initiative to use the existing Bank of Ghana (BoG) Domestic Gold Purchase (DGP) Programme to support the import of petroleum products into Ghana, is also seen as a means of controlling exploitation or profiteering by the cartel of Bulk Import, Distribution and Export Companies (BIDECs/BDCs) and Oil Marketing Companies (OMCs).
Insiders have said that since the initiative begun “where gold purchases under the BoG’s DGP Programme mainly through the Precious Minerals and Marketing Company (PMMC) and where required from aggregators and mining firms is used to purchase petroleum products”, lots of foreign exchange is being saved by the Central Bank.
The G4O programme is said to have disrupted “the status quo and many beneficiaries of that status quo are very pissed. Ghana was being taken for a ride and we are putting a stop to it. Hopefully in a couple of months we will see very tangible benefits at the pump. Already Bank of Ghana is saving foreign exchange”, an insider told The Herald.
But other market analysts have opined, that getting the state-owned Tema Oil Refinery (TOR) working is the best way to control the exploitation of consumers of petroleum products by the BIDECs/BDCs and OMCs as well as check the stopping or reducing USD350 million monthly import expenditure.
A six-page document prepared by the government and in the custody of The Herald on the G4O programme has explained that it “is intended to free up foreign exchange resources to meet petroleum imports of the country thereby reducing pressures on the Bank of Ghana’s foreign reserves and the banking sector emanating from the Bulk Import, Distribution and Export Companies (BIDECs) request for foreign exchange”.
“The programme also aims to procure petroleum products at very competitive prices through Government-to-Government (G2G) arrangements. The programme will ensure that the cost of importing the products from international oil traders will always be comparatively lower.
“The consequent reduction in foreign exchange pressures, the reduction in premiums charged by international oil traders as well as efficiency gains from the value chain will translate to lower ex-pump prices in the country.
The G4O Programme Process Flow and Requirements are that “all the dore gold produced and exported by companies with licensed small-scale concessions including community mines through the PMMC shall be purchased by the BoG. The Ministry of Lands and Natural Resources has issued directives towards the realisation of the programme”.
“The purchased dore gold is used for the payment of oil supply to Ghana. Payment for oil supply is to be done in two channels: by way of barter trade or via broker channel”.
