Fuel Prices To Drop Due To Gold For Oil Deal- NPA Tells Ghanaians, More Details

The National Petroleum Authority (NPA) has assured Ghanaians that the prices of petroleum products imported under the gold for oil (G4O) program will reflect at the pumps to benefit consumers.

The NPA in a statement said the gold for oil barter trade initiated by the government will lead to a drop in fuel prices.

It said it would work with the Bulk Oil Storage and Transportation Company (BOST) to negotiate prices with international traders adding that it will regulate the prices of petroleum products.

The statement said all Bulk Import, Distribution, and Export Companies (BIDECs) and Oil Marketing Companies who wish to purchase products under the G4O program 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.

It said the implementation of the gov­ernment’s G4O program started with the arrival of the first consignment of about 40,000 metric tons of diesel on January 15, 2023, valued at about US$40 million.

The first consignment of 40,000 metric tons of diesel, the statement explained constituted about 10 percent of the country’s combined monthly demand for petrol and diesel and is expected to gradually increase imports under G4O to constitute about 50 percent of the country’s total demand of petrol and diesel by March 2023.

It said the excellent target of the program was to utilize additional foreign exchange assets from the Bank of Ghana’s Homegrown Gold Purchase (DGP) program to give foreign currency to the importation of petroleum products for the country which presently stands at about US$350 million every 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 program would ensure that the cost of importing the products from international oil traders would be comparative­ly cheaper, adding that the “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.

It added: “The implementation of the G4O will 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.

“The program will ensure that the cost of importing the products from international oil traders will be comparatively cheaper.

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“The consequent reduction in foreign exchange pressures and premiums charged by international oil traders, as well as efficiency gains from the value chain, will lead to lower ex-pump prices in the country,” it noted.