The inaugural consignment of 40,000 tons of oil imported into the nation under the Gold-for-Oil policy was acquired with cash, not gold as commonly asserted by the Vice President, Dr. Mahamudu Bawumia, according to deputy energy minister Andrew Egyapa Mercer.
His admission follows repeated requests from industry experts, including the Institute of Energy Securities and COPEC, who questioned the sustainability of the agreement and urged the government to reveal the amount of gold it traded for the 40,000 metric tons of gasoline.
The Minority in Parliament also questioned the policy’s viability, claiming that it won’t have an impact on the current pump prices.
Deputy Energy Minister Andrew Egyapa Mercer claimed in an interview with Citi News that the original companies they dealt with lacked the ability to trade 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.”
The companies they first worked with lacked the capacity to trade gold for oil, according to Deputy Energy Minister Andrew Egyapa Mercer in an interview with Citi News.
Speaking at the New Year School this year, Dr. Bawumia asserted that, given the nation’s current economic difficulties, the gold for oil strategy is the ideal one.
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“…Ghana took delivery of its first cargo under the gold for oil policy. This is our test cargo, it is the cargo to test the framework if everything that has been put in place will work, by the grace of God the Framework will work and if that should happen we are going to save a lot of foreign exchange and reduce the pressure on our currency.”“…Ghana took delivery of its first cargo under the gold for oil policy. This is our test cargo, it is the cargo to test the framework if everything that has been put in place will work, by the grace of God the Framework will work and if that should happen we are going to save a lot of foreign exchange and reduce the pressure on our currency.”
John Jinapor, a member of parliament for the Yapei Kusawgu seat, had already warned that the so-called gold for oil arrangement would cause the nation’s debt to spiral out of control.
The legislator described the deal by the government “as a lazy man’s approach, because gold, first of all, needs to be expressed in its monetary value. You can’t just say take an ounce of gold and give me a barrel of oil, as it used to be in the real barter that you are talking about. You must first of all, value that gold in dollar terms, and that is the function of currency or money”.
Source: Citinews
