Alex Mould, a former CEO of the Ghana National Petroleum Commission (GNPC), predicts instability among industry players as a result of the government’s gold-for-oil strategy.
Ghana received 40,000 metric tons of the first cargo under the scheme from the United Arab Emirates on January 15, 2023.
The government’s action is intended to address the declining foreign exchange reserves and the demand for dollars from oil importers, which are weakening the local cedi and driving up living expenses.
Speaking on Face to Face on Citi TV with Umaru Sanda, Mr. Mould, observed that, the Bulk Oil Distribution Companies (BDCs) who are not enthused about the Bulk Oil Storage and Transportation (BOST) bringing oil to the country, will definitely not be happy with the government.
He claims that by importing finished goods into the nation, the government is essentially doing the same thing as the current industry participants.
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He criticized the government for failing to make it plain to industry participants that there won’t be a level playing field now that the gold-for-oil policy has been implemented.
Mr. Mould stated that, “There are players already in the system and I think it’s going to cause a little chaos because you are introducing another player. First of all, the Bulk Distribution Companies (BDCs) will not be happy, because they are not even happy BOST brings products into the country”.
“Now government is going to be a player, and it’s going to use BOST, Tema Oil Refinery (TOR), Go Energy as BDCs. They are basically using our foreign exchange to favour a certain player, although that player is government. Government should make it very clear to the other players that it’s not going to be a fair playing field. We government, are going to take care of government, and you the private players should take care of yourselves. This is what you should tell people, rather than saying we are now doing a gold-for-oil barter swap, as if you are doing something different, you are not doing something different”.
He urged the government to be open with the current actors out of concern that it [government] might not be fair with them.
“Who is the buyer of the gold? Who is selling you the oil? Transparency and accountability have to be clear to the existing players. I’m not saying the gold-for-oil is a bad thing, but it’s not transparent, it’s not clear. And may not be fair to the existing players, because all you are doing is what you should have done long ago,” he pointed out.
The amount of foreign exchange that will be received as a result of the barter deal involving gold for oil, according to the former CEO of the GNPC, won’t increase or decrease.
“It’s a zero-sum here, the amount of foreign exchange we will get for this gold-for-oil -policy is not going to reduce or increase. We are still going to get the foreign exchange we sell from gold coming into the country, unless BoG and Precious Minerals Marketing Company (PMMC) are very lax and not allowing the sales from the gold to come into the country. Let us fix the challenge in the whole value chain to know who is doing what,” Mr. Mould suggested.
Plans for the distribution and sale of the oil are to be developed by the Energy Ministry in conjunction with the Bulk Oil Storage and Transportation and Oil Marketing Companies.
Source: Citinews
