The government has commenced a reassessment of the controversial Gold for Oil (G4O) policy as concerns grow over possible fuel shortages in parts of the country. The review process was kickstarted by Energy Minister John Jinapor, who met with key industry stakeholders to discuss the policy’s future and its impact on the petroleum sector.

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On his first day in office, Minister Jinapor held talks with representatives from the Bulk Oil Distribution Companies, the Chamber of Oil Marketing Companies, and other key players in the energy sector. The discussions centered on evaluating the sustainability of the G4O initiative and finding alternatives to ensure a stable fuel supply.

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“We're also reviewing the Gold for Oil programme as we promised in our manifesto,” Minister Jinapor announced during the meeting on Tuesday, February 4. Providing further insight into the government's approach, he added, "The Minister of Finance is already working on the gold aspect and intends to set up what he describes as a Gold Board. On our side, we are reviewing it [Gold for Oil policy].

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If you see some work, it's just an interim arrangement." He emphasized that while a review is necessary, an immediate halt to the policy is not feasible without a viable replacement. As part of efforts to improve governance within the energy sector, the Minister assured stakeholders of greater transparency. He revealed that President John Dramani Mahama is setting up an independent committee to oversee operations in the energy industry.

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“We intend to work with you [stakeholders]. We cannot claim to know everything, and in this sector, you captains of industry sometimes even know better than those of us in office,” he acknowledged. The Gold for Oil initiative, introduced in 2022 by former Vice President Mahamudu Bawumia, was designed to reduce Ghana’s reliance on foreign currency reserves for oil imports.

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By bartering gold for petroleum products, the policy aimed to curb pressure on the Cedi, stabilize fuel prices, and address balance of payment challenges. Under the initiative, the Precious Minerals Marketing Company (PMMC) purchased over 60,000 ounces of gold worth more than $97 million from local miners by March 2023.

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However, the company had set a higher monthly target of acquiring at least 160,000 ounces, valued at around $300 million, to meet about 50% of Ghana’s oil consumption needs. Despite its objectives, the policy has drawn criticism from experts, including the Institute of Statistical Social and Economic Research (ISSER), over concerns about transparency and financial risks. Principal Investigator at ISSER, Dr.

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Fred Dzanku, warned that the initiative is vulnerable to illicit financial flows due to a lack of parliamentary oversight and a legal framework. He further noted that, “The absence of pricing regulation, along with the lack of clarity on the refinery status of gold before it is sold, creates opportunities for mispricing and under-devaluation when exchanged for oil.” Dr.

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Dzanku also highlighted concerns about the selection process for suppliers and buyers, stressing that the opacity of key transactions could raise further transparency issues. With the review underway, stakeholders in the petroleum sector are closely monitoring the government's next steps, especially as the country grapples with potential fuel shortages.

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