Former Chief Executive Officer (CEO) of the Ghana National Petroleum Commission (GNPC), Alex Mould, says government’s gold-for-oil policy will create chaos among industry players.
Ghana on January 15, 2023, took delivery of 40,000 metric tons of the first consignment under the policy from the United Arab Emirates.
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.
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.
According to him, government is basically doing the same thing the existing industry players do by bringing in finished products into the country.
He took a swipe at the government for failing to make it clear to industry players that there won’t be a fair playing field now that it has commenced the gold-for-oil policy.
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 charged government to be transparent with the existing players, fearing that it [government] may 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 former CEO of the GNPC said the amount of foreign exchange that will come in as a result of the Gold-for-oil barter trade will neither increase nor 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.
The Energy Ministry, the Bulk Oil Storage and Transportation and Oil Marketing Companies are to formulate plans for distribution and sale of the oil.