Gold for oil: Benefitting OMCs to sign undertaking to reduce prices
All Oil Marketing Companies (OMCs) that purchase petroleum products under the government’s Gold for Oil (G4O) Programme will be required to sign an undertaking to guarantee a reduction in their prices at the pumps.
The decision, according to the National Petroleum Authority (NPA) was intended to ensure that consumers benefited from the programme.
Ghana took delivery of 40,000 metric tonnes of petrol and 35,000mt of diesel last week under the G4O Programme – in addition to the 40,000mt of diesel that arrived in the country last month.
In an interview with the Ghana News Agency, Abass Ibrahim Tasunti, head of economic regulation, NPA, said, the Authority was optimistic that the new arrival would lead to a “minimal reduction” in fuel prices at the pumps.
He said a number of OMCs in the top 25 companies had confirmed their readiness to lift the product.
“The discharge is complete, and the products are now about to go to the market. Definitely, it is expected that because the prices are a bit competitive compared to the other sources of import, it would lead to some minimal reduction,” Tasunti said.
He added: “Prices are deregulated; so, with this (G4O) coming in, we have to monitor the prices of the OMCs that are lifting the product.”
Tasunti said as part of the implementation criteria, interested OMCs would be required to sign the undertaking, adding that companies that failed to comply with the agreed requirements would be sanctioned.
“The undertaking is being signed in all the terms and conditions to ensure that the requirements or guidelines the (OMCs) are supposed to meet, including the reduction in prices for G4O products are met,” he said.
The government announced the gold for oil policy in November last year as an innovative measure to exchange gold for petroleum products instead of US dollars.
The government said the move was intended to reduce the demand for dollars for the importation of petroleum products and by extension reduce the rate of depreciation of the cedi.
It is estimated that the country required about US$400mto import petroleum products monthly – out of which the Bank of Ghana is able to supply only US$120 million to petroleum importers.
The government has targeted that the gold for oil programme would account for 50% of petroleum products imported into the country.
The NPA has indicated that only OMCs with at least 45 outlets across the country would be eligible to lift the latest consignment under the G40 Programme.
The Authority said the move would ensure that consumers felt the impact of the programme in terms of a reduction in prices of petrol and diesel at the pumps.