Ghana has recently received its second shipment of petroleum products as part of its Gold-for-Oil Programme. The shipment, which cost 40 million dollars, included 40,000 metric tons of diesel and 35,000 metric tons of petrol. The National Petroleum Authority’s CEO, Dr Mustapha Abdul-Hamid, has announced that only Oil Marketing Companies (OMCs) with at least 45 retail outlets will receive the products, in consultation with the Association of Oil Marketing Companies (AOMCs). This is to ensure that the benefits of the G4O programme are felt by consumers nationwide, rather than being divided amongst the 150 OMCs.
The first consignment, also of 40,000 metric tons, was received on January 15, 2023. The Gold-for-Oil initiative aims to reduce Ghana’s dependence on the US dollar for international transactions. The Vice President, Dr Mahamudu Bawumia, had announced the programme at the 2022 Association of Ghana Industries (AGI) Awards in Accra, highlighting its potential to save the country the $3 billion currently spent on oil imports, thus allowing it to accumulate more international reserves. The use of sustainably mined gold for oil imports will help reduce Cedi depreciation caused by the demand for forex to finance oil imports.
According to Dr Bawumia, the implementation of the gold-for-oil policy will bring about significant changes to the country’s balance of payments, and will reduce the depreciation of its currency, which in turn will lower the prices of fuel, electricity, water, transport and food. This is because the exchange rate will no longer be a factor in determining fuel and utility prices, since domestic sellers of fuel will no longer need foreign exchange to import oil products
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