Gold-4-Oil: NPA announces new criteria for petroleum distribution
The National Petroleum Authority (NPA) in Ghana has developed a criteria in consultation with the Association of Oil Marketing Companies (AOMCs) for the distribution of the next consignment of petroleum products imported under the Gold for Oil (G4O) programme.
The move aims to ensure that the impact of the G4O programme is felt by consumers across the country, whilst addressing the concerns of the AOMCs regarding a lack of clarity regarding the allocation of products supplied under the programme to its members. The G4O programme is expected to not only lower prices of petroleum products slightly but also reduce forex risk.
Speaking at a meet-the-press in Accra on Wednesday, the NPA Boss, Dr Mustapha Abdul-Hamid, disclosed that the criteria takes into consideration the top 25 OMCs who distributed petrol and diesel in 2022 with not less than 45 retail outlets across the country. Better results are expected as more G4O cargoes arrive, he said.
Prior to the implementation of the G4O programme, the average monthly petroleum product import bill ranged from $350m to $400m, as stated by Dr Abdul-Hamid. He also mentioned that the petroleum downstream dollar demand accounted for 20% of national demand.
The Bank of Ghana (BoG) had launched a special exchange rate auction programme for the petroleum downstream in April 2022; however, the special auction programme could not meet 100% of forex demand in the country. As a result, the inadequacy of BoG supply pushed BIDECs to speculate forex rates arbitrarily based on proposed rates from commercial banks.
According to Dr Abdul-Hamid, the gold payment was mooted as a solution to the pressure that petroleum downstream put on the cedi. The NPA regulates G40 products prices on the interim (Ex-ref price and Ex-pump prices) and has intensified price monitoring activities with penalties for defaulting service providers.
In addition to this, the NPA is committed to ensuring product quality and integrity. It supplies low sulphur fuels (cleaner fuels) with a maximum of 50ppm for imports and a maximum of 1500ppm for domestic production. The NPA also undertakes periodic petroleum product monitoring exercises, conducts fuel marker monitoring and quality monitoring of fuel standards (Quality Control) including checking of water in fuel and collaborates with security agencies to prevent illegal imports, exports and product dumping.
Dr Abdul-Hamid said the Authority used technology (Electronic Cargo Tracking System (ECTS), National Fuel Monitoring System (NFMS) and the Automatic Tank Gauge system) to ensure intended delivery of petroleum products along the petroleum downstream value chain.
The Authority also revoked licenses and published the names of defaulting Petroleum Service Providers (PSPs) and Laycans allocation and monitoring to ensure adequate supply as some of the activities undertaken to ensure order in the downstream petroleum industry.
The NPA’s collaboration with the AOMCs has helped establish a criteria for the distribution of the next consignment of petroleum products under the G4O programme. With the inclusion of the top 25 OMCs who distributed petrol and diesel in 2022 with not less than 45 retail outlets across the country, it is hoped that the impact of the programme will be felt by consumers nationwide.
The NPA’s implementation of measures to ensure product quality and integrity, and the use of technology to ensure the intended delivery of petroleum products, will help to promote transparency and efficiency in the downstream petroleum industry.
