Gold For Oil Consignment Is Selling Higher Than Fuel From Other Sources – Dr Acheampong

An Economist and Political Risk Analyst has highlighted some downsides of the gold for oil policy.

He said that prices of the gold for oil consignment on the market are higher compared to those from other sources of fuel.

Dr. Theo Acheampong pointed out that the Bulk Oil Distributing Companies (BDCs) who did not sign up for the policy are rather selling fuel at lower prices.

This, according to him, does not meet the second objective for the policy, thus to bring down prices of fuel at the pumps.

“As we speak currently in the recent pricing window, the gold for oil product that came in are actually selling slightly higher than products that are on the market that the normal BDCs who are not participating in this policy programme, are doing,” he stated in an interview on JoyNews Newsfile on Saturday.

Giving further details, Dr Acheampong said, “Petrol under gold for oil is selling at about 9.6 cedis per litre and from the non gold for oil sources are selling it at about 9.1 cedis per litre. So you got almost like a 50 pesewa difference. Similar thing with diesel.”

For this reason he dismissed claims that the gold for oil policy is the reason for a decline in fuel prices at the pumps.

He explained that, “what is driving the price at the local level which is a function of the international price and crude oil price, is the function of the exchange rate.”

“It cannot be the case that all the drop that we are seeing is truly attributable to this gold for oil policy,” Dr. Acheampong reiterated.

But in reaction, the Deputy Energy Minister, Andrew Egyapa Mercer said the comment is not borne out of facts.

According to him, the price of fuel on the market is a margin game, adding that, “there is a cap within which the OMCs and the BDCs operate. So if you want to remain competitive, you can reduce your margin which is really the profit that you make on the product that you sell.”

Reading out the flat average prices per pricing window, he said “the window of January 21st when the first consignment came in, PMS by the BDCs was 889.59 per metric tonne and gold for oil was 888.36 per metric tonne.

“The week of the second February window PMS under the BDC regime is 848.35 and under the gold for oil is 839.83. Also the March 1 window, PMS was 829.73 and under gold for oil is 785.63,” he said.