Consumers should expect the price of petrol to go down by GHC1 soon, the managing director of the Bulk Oil Storage and Transportation Company Limited (BOST), Edwin Provencal has said.
He said this is possible due to the implementation of the government’s gold for oil policy.
Provencal said the country is expecting four consignments in February under the gold for oil policy and this will drive prices of petroleum products down.
He said the BOST is working with the National Petroleum Authority (NPA) to increase these consignments.
Speaking on the Asaase Breakfast Show on Monday (13 February), Provencal said, “I can tell you for a fact that we’re working on the pricing with NPA and we should expect GHC1 reduction at the pump for gasoline,” Provencal said.
Credibility in the market
Provencal said in the long term the government’s gold for oil policy will bring BOST the needed credibility in the marketplace.
He said the policy will also help BOST to solve some challenges when it comes to building a strategic reserve of stocks of petroleum products for the country.
“We also mandated to build a strategic reserve of stocks of petroleum products to meet a minimum of six weeks of national consumption … this we haven’t done too well for obvious reasons. This is because we didn’t have the men and the money. Hopefully, this programme [gold for oil] will help us solve some of these challenges in the long term.”
He added, “We use to have open credit account supplies and this means that they give you the product after a while you pay them without any instrument and because of the past we abused it and we went into debt. So we lost credibility in the market place.”
“We are restoring that credibility. And we believe strongly that this programme [gold for oil] if it runs for a while will give us that credibility,” he added.
In November 2022 the Government of Ghana, through the vice-president, announced plans to buy oil products with gold rather than US dollars.
Vice-President Mahamudu Bawumia said the gold for oil policy was meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which was weakening the cedi and increasing the cost of living.
“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” Bawumia said.
He added that using gold would prevent the exchange rate from having a direct impact on fuel or utility prices, as domestic sellers would no longer need foreign exchange to import oil products.