Several drawbacks of the gold for oil policy have been raised by an economist and a political risk analyst, Dr Theo Acheampong.
According to him, the market’s gold for oil consignment prices are greater than those for other fuel sources.
Dr. Theo Acheampong made the observation that the Bulk Oil Distribution Companies (BDCs) that did not sign up for the program offer fuel at a lower cost.
He claims that this does not accomplish the policy’s second goal, which is to reduce petrol prices at the pump.
“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.
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.
It would be recalled that Vice President Dr Mahamadu Bawumia speaking at the commissioning of a new head office for the Bulk Oil Storage and Transportation Company in Accra on March 15 stated that the country will save $4.8 billion annually from the ‘Gold for Oil’ policy which began this year.
According to him, the ‘Gold for Oil’ policy which is now in its third month is already yielding a positive impact and is expected to cause a reduction in prices of petroleum products at the pumps.
However, Mr. Bawumia’s assertion was refuted by the Deputy Minority Leader, Emmanuel Armah Kofi Buah saying the recent decline in petroleum products has nothing to do with government’s gold for oil programme.
The former Minister for Energy and Petroleum said the decline is due to global fall in crude oil prices.
“Mr Speaker, when we are discussing this matter, we must be very serious. I heard the Vice President saying that petrol prices have gone down because of gold for oil…the reason the fuel prices have gone down is because crude prices were over $100 and it has come down to $72 globally. It has nothing to do with gold for oil,” he stated.