The Minority in Parliament is warning the country’s debt stock risks accumulation as a result of the government’s gold for oil policy.
Despite criticism of the policy and concerns about the deal’s viability, the government claims that it has contributed to the drop in fuel prices.
During a debate on President Akufo-Addo’s State of the Nation Address, Deputy Minority Leader Emmanuel Armah Kofi Buah denied the assertion and outlined some risks associated with the move.
“The reason fuel prices have gone down is because crude prices on the international market have reduced from over US$100 dollars to US$72. It has nothing to do with Gold for Oil and Bawumia. If we are not careful, it is going to create a huge debt. So now the Bank of Ghana financing the importation of this product exposing us and putting Ghana at risk”, he said.
However, Deputy Minister of Energy Andrew Egyapa Mercer says the intervention will help address the exchange rate’s challenges.
Edward Bawa, a member of Parliament’s Mines and Energy Committee, wants the government to provide details on the terms of engagement for the funds used in the purchase of the first consignment of oil under the government’s gold for oil policy.
The National Petroleum Authority (NPA) revealed that the initial 40,000 tonnes of diesel that arrived in January under the scheme were valued at US$40 million, which the Member of the Parliament for Bongo contends was pre-financed by the central bank.
Speaking to journalists, the lawmaker stated that the government must hold the transaction accountable to the public.
“You recall that the Deputy Minister of Energy, Andrew Egyapa Mercer said that the first consignment was not paid with gold but ore-financed by the Bank of Ghana. Question is, was it a loan to BOST? If it was, what were the terms of the engagement? That has not been made public. If you look at the quantity of petroleum that they bring, it is not enough to take care of the window.”
There have been several calls for government to provide contract details of the recent fuel consignment brought under the gold for oil policy.
The move by the government is meant to tackle dwindling foreign currency reserves coupled with the demand for dollars by oil importers, which is weakening the local cedi and increasing living costs.
It is expected to push prices of fuel further down after the recent reduction at the pumps.