The government has disclosed that the gold for oil policy would not immediately lead to a reduction in fuel prices until more consignment arrives in Ghana.
The Deputy Energy Minister, Andrew Egyapa Mercer, said the government didn’t expect the prices of fuel to change immediately with only 10 percent of the total deal.
The initial 40,000 metric tons of oil arrived in Ghana on January 15.
The expectation was that the arrival of the 40,000 metric tons would reduce the pressure on forex and also present the country with cheaper fuel, but that has not been the case as fuel prices have increased twice within the period upsetting majority of Ghanaians.
But speaking on Eyewitness News, on Thursday, Mr Egyapa Mercer said the first consignment was just part of the pilot process.
“It wasn’t our expectation that it [gold for oil policy] will have an overnight effect because there are stocks that are already on the market, so you cannot expect that an injection of 10 per cent of the gold for oil policy will suddenly change the pricing dynamics. It is a process and not an event.”
Mr Egyapa Mercer had earlier confirmed that the initial consignment of 40,000 metric tons of oil brought into the country under the Gold-for-oil policy was purchased with cash instead of gold.
He explained that the cash was from gold sold abroad and the proceed realised used for buying the fuel.
His disclosure comes after calls by Industry experts such as the Institute of Energy Securities and COPEC for the government to disclose the quantity of gold it exchanged for the 40,000 metric tons of fuel as they raised questions over the viability of the deal.
The Minority in Parliament also questioned the feasibility of the policy arguing that it won’t affect the current prices at the pumps.
Speaking to Citi News, Mr. Mercer said the companies they dealt with initially did not have the capacity to exchange gold for oil.
“The policy actually started with an intent to do strict barter for gold and petroleum products, but it became apparent that any of the international oil trading companies that do not have a commodity wing to deal with gold on their behalf will be excluded from the policy.
“We developed the policy such that we were operating two streams, one was direct barter and the second was monetising the gold, so we can pay for IOTs that were not other commodity focused but solely petroleum products…so the test run that we did was actually paid through the second route.”
