Dr. Edwin Alfred Provencal, Managing Director of the Bulk Oil Storage and Transportation Company Limited (BOST), has staunchly defended the Gold for Oil policy, asserting its crucial role in preventing fuel shortages similar to those currently plaguing Nigeria.
Dr. Provencal emphasized that the program has been highly effective since its inception, countering critics who have called for its discontinuation.
In an interview with Citi Business News, Dr. Provencal highlighted the program’s significant contribution to economic stability, particularly in maintaining a steady fuel supply across the country.
“Foreign exchange rates respond to various factors, but in summary, Gold for Oil has been immensely successful. Without it, we would be facing severe shortages, and fuel prices could have soared to 35 or 40 cedis per liter. Gold for Oil has ensured that, despite prices being slightly higher, fuel is available, unlike in some neighboring countries, and prices remain below the peak levels of November 2022,” Dr. Provencal explained.
The Gold for Oil program officially launched on January 15, 2023, with the first shipment of approximately 40,000 metric tonnes of diesel valued at $40 million. The program’s primary objective is to leverage additional foreign exchange resources from the Bank of Ghana’s Domestic Gold Purchase (DGP) program to finance the importation of petroleum products, which currently costs about US$350 million per month.
Under the program, suppliers willing to accept gold in exchange for petroleum products are provided with the equivalent volume of gold by the Bank of Ghana. The program also allows the Bank of Ghana and International Oil Trading Companies to open Gold Metal Accounts in a mutually agreed gold refinery for gold transfers. Payments for oil supply are executed through two channels: direct barter trade (gold for oil) or through a broker channel where the gold is converted into cash and paid to the supplier.
