"Exclusive: Gold-for-Oil fuel more expensive than non-Gold-for-Oil fuel purchased by OMCs"

" Exclusive: Gold-for-Oil fuel more expensive than non-Gold-for-Oil fuel purchased by OMCs \r\n\r\n Deep throat sources within the downstream petroleum industry and familiar with the gold-for-oil policy has revealed to norvanreports, the per litre cost of both diesel and petrol sold by BDCs to OMCs under the gold-for-oil policy for onward sale to the public. \r\n\r\n Information reaching norvanreports indicates that a per litre cost of diesel and petrol cost for OMCs under the gold-for-oil policy costs GHS 10.10 pesewas and GHS 9.60 pesewas respectively. \r\n\r\n This is higher than the per litre cost of GHS 9.50 pesewas and GHS 9.10 pesewas for diesel and petrol sold to OMCs not participating in the policy. \r\n\r\n In view of the above information, one can confidently assert that, rather than aiding to reduce the burden of high fuel prices at the pumps, the gold-for-oil policy is rather adding to the cost of fuel prices at the pumps, making Ghanaians worse off. \r\n\r\n The high cost of diesel and petrol sold to OMCs under the policy as against those not operating under the policy, therefore contradicts assertions by the government and particularly, Vice President Dr Mahamudu Bawumia that the gold-for-oil policy has led to reductions in the prices of fuel and is expected to lead to further decline in fuel prices at the pumps. \r\n\r\n At the moment, the decline in fuel prices industry experts notes can only be attributed to two main factors namely; the significant reduction in the international market of crude oil price and the relatively sustained stability of the cedi over the past few weeks. \r\n\r\n Recent data indicates that Brent crude oil price and the West Texas Intermediate crude oil price have fallen from a price of above $100 per barrel to $73 and $66 per barrel respectively. A reduction in the international market price of crude oil automatically results in a reduction in the price of fuel sold at the pumps. \r\n\r\n This is further supported by the sustained stability of the cedi over some weeks now with a dollar selling for GHS 12.43 pesewas on the retail forex market. \r\n\r\nYesterday Thursday, March 16, 2023, our readers will recall our story which was headlined \" Gold-for-Oil Policy: Potential losses by BOST under policy envisaged\", in which Executive Director of the African Centre for Energy Policy (ACEP), Benjamin Boakye said it could not be true that fuel prices reduction was as a result of the Gold-for-Oil deal.\r\n\r\nThat put us to work and we can now agree with the ACEP Boss that indeed government\u2019s gold for oil policy is not the reason but for the price on the international price of crude going down and the stability of the cedi we would have seen an increase in fuel prices at the pump.\r\n\r\n See below the story we did yesterday if you missed it; \r\n Gold-for-Oil: Potential losses by BOST under policy envisaged \r\nThe Bulk Oil Storage and Transportation Company Limited (BOST) in Ghana is expected to face potential losses under the government\u2019s gold for oil policy, according to the Executive Director of the African Centre for Energy Policy (ACEP), Benjamin Boakye.\r\n\r\nBoakye has raised concerns about the import cost of fuel under the policy, which he argues is higher than the cost at which Bulk Distribution Companies (BDCs) in the country purchase fuel from BOST under the programme. As a result, BDCs are likely to undercut prices from BOST, causing losses for the company.\r\n\r\nThese assertions come amidst an anticipated decline in fuel prices at the pumps, expected to range between 3% and 10% starting from March 16, 2023. However, Boakye has argued that this decline is not due to the government\u2019s gold for oil policy.\r\n\r\nInstead, he attributes it to the reduction in oil prices on the international market, with Brent and WTI falling to $73 and $66 per barrel respectively. Boakye also notes that the relative stability in the cedi supports the decline in fuel prices.\r\n\r\nBoakye\u2019s statement contradicts that of the Vice President of Ghana, Dr Bawumia, who claims that the anticipated decline in fuel prices is due to the government\u2019s gold for oil policy, which he further asserts that, will result in foreign exchange earnings of over $4.8bn for the country.\r\n\r\nThe potential losses for BOST and the contradicting statements from Boakye and Dr Bawumia raise concerns about the impact of the gold-for-oil policy on the Ghanaian economy. While the policy aims to boost foreign exchange earnings for the country, it is essential to consider the impact on BOST\u2019s financial viability and the potential implications for Ghana\u2019s fuel prices.\r\n\r\nMoreover, the government needs to consider the concerns raised by industry experts and conduct thorough analyses to determine the best approach for balancing the country\u2019s economic goals and BOST\u2019s financial sustainability. These analyses should include the impact of the policy on BOST\u2019s operational costs and the potential competition from BDCs. Additionally, the government should consider exploring alternative ways of boosting foreign exchange earnings, such as diversifying the country\u2019s export base or investing in other sectors.\r\n\r\nAs Ghana seeks to advance its economic growth and development, it is crucial to have a comprehensive understanding of the implications of policy decisions on the country\u2019s industries and economy as a whole. Only then can the government make informed decisions that balance the interests of all stakeholders and foster sustainable economic growth."

"Exclusive: Gold-for-Oil fuel more expensive than non-Gold-for-Oil fuel purchased by OMCs"

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