The National Petroleum Authority (NPA) has announced the full implementation of the government's Gold for Oil (G40) programme, which began with the arrival of the first consignment of 40,000 metric tonnes of diesel on January 15, 2023.
The consignment is valued at approximately US$40 million.
According to the NPA, the objective of the G40 programme is to provide foreign currency for the importation of petroleum products, which currently stands at about US$350 million per month, using additional foreign exchange resources from the Bank of Ghana‘s Domestic Gold Purchase (DGP) programme.
Payment for oil supplies can be made through barter trade, where gold is exchanged for oil, or via a broker channel, where the gold is converted into cash and paid to the supplier.
The first consignment of diesel constitutes about 10% of the country's combined monthly demand for petrol and diesel.
The NPA plans to gradually increase imports under G40 to constitute about 50% of the country's total demand of petrol and diesel by March 2023.
The implementation of G40 will ease pressure on the US dollar, the currency used for the importation of petroleum products, and avoid the occasional increases in petroleum prices resulting from the depreciation of the cedi against the dollar.
The programme is expected to make the cost of importing petroleum products cheaper and lead to lower ex-pump prices in the country.
The NPA will regulate the prices of petroleum products imported under G40 until the volumes increase significantly.
The prices at which BOST sells the products to Bulk Import, Distribution, and Export Companies (BIDECs) and the prices at which the BIDECs sell the products to Oil Marketing Companies (OMCs) will be approved by the NPA.
The applicable exchange rate for pricing the products supplied under G40 will be based on the average rate at which the gold was purchased from licensed gold exporters by the Bank of Ghana.
The NPA will ensure that OMCS pass the price on to consumers accordingly. BIDECs and OMCs must sign an undertaking to comply with the terms and conditions for participating in the purchase and sale of G40 products.
The Corporate Affairs Directorate of the NPA stated, “All BIDECs and OMCS who wish to purchase products under the G40 programme will be required to sign off an undertaking confirming their willingness to comply with the terms and conditions for partaking in the purchase and sale of G40 products.”