Deputy Energy Minister, Andrew Egyapa Mercer has disclosed that the first consignment of fuel under Ghana’s Gold for Oil deal will arrive on the shores of the country in January 2023.
The Deputy Minister on Wednesday, December 21 stated that the necessary agreement had been completed for the first consignment to arrive.
“On the 10th, 11th, and 12th of January, the first consignment of the finished product is going to arrive in this country coming from the United Arab Emirates. All the necessary agreement that needed to be executed has been executed. A lot more interest had been shown by other oil traders in terms of Government to Business. Government to Government conversations have also taken place,” he said.
The Minister noted that significant progress had been made as part of efforts to import cheap fuel to Ghana.
The Gold for Oil barter deal will see the country getting cheaper fuel in exchange for Gold.
Prices of fuel are expected to go down further after cheap fuel is introduced into the market.
Mr. Egyapa Mercer explained that the deal is intended to “complement what it is that the private sector who are operators within the space are providing.”
According to him, this move by the government will take some pressure off the dollar and make it available to other people to avoid increasing pressure on the cedi.
“This new framework is to be fully operational by the end of the first quarter of 2023,” he said on Joy news on December 21.
Fuel prices at the time of the announcement were high at most fuel pumps across the country, with consumers appealing to the government for intervention.
Subsequently, a government delegation was dispatched to Abu Dhabi to negotiate a deal to bring petroleum products onto the Ghanaian market.
In November, the government said it is negotiating a gold-for-oil barter deal to address using the country’s “dwindling foreign exchange reserves” to procure oil products.
Vice President Dr Mahamudu Bawumia disclosed this on his Facebook page on Thursday, November 24 saying, “The barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since its independence.”
He said the government expects “this new framework to be fully operational by the end of the first quarter of 2023.”
Petroleum products saw a hike in prices of diesel and petrol. The price of diesel went up to more than GH¢23, while the price of petrol shored up to GH¢18.
The Vice President said, “To address this challenge, the government is negotiating a new policy regime where our gold (rather than our US dollar reserves) will be used to buy oil products.
“The barter of sustainably mined gold for oil is one of the most important economic policy changes in Ghana since independence.”
He added, “If we implement it as envisioned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency and avoid negative implications on fuel, electricity, water, transport, and food prices.”
Dr. Bawumia explained that “The exchange rate (spot or forward) will no longer directly enter the formula for the determination of fuel or utility prices since all the domestic sellers of fuel will no longer need foreign exchange to import oil products.”
According to him, “The barter of gold for oil represents a major structural change. My thanks to the Ministers for Lands and Natural Resources, Energy, and Finance, Precious Minerals Marketing Company, and the Governor of the Bank of Ghana for their supportive work on this new policy. We expect this new framework to be fully operational by the end of the first quarter of 2023.”