Gov’t may sell oil to cronies – IES on Gold for Oil selection of OMCs

The Institute of Energy Security (IES) has said that selling oil to selected Oil Marketing Companies under Gold for Oil Policy may land in the hands of cronies and friends of the government.

This follows the National Petroleum Authority (NPA)’s announcement that under the Gold for Oil Program, it will only sell oil to Oil Marketing Company with not less than 45 outlets.

Speaking at the meet-the-press series in Accra on Wednesday, the NPA Boss Dr Mustapha Abdul-Hamid said the decision would ensure that consumers felt the impact of the programme in terms of reduction in prices of petrol and diesel at the pumps.

But, the Executive Director for IES, Nana Amoasi VII said the government must reconsider its decision on the mode of selling oil to OMCs under the Gold for Oil policy.

“You brought about 40,000 metric tons just about four weeks ago and that represents just about a week of our national consumption. Can this have an effect on Ghanaians and disposable income of consumers? If you want to have any meaningful impact with that program, then of course you should be covering more than 50 percent of our national demand. But 40,000 metric tonnes represents just 10 percent of our monthly demand when we are talking about other products.

The Government announced the Gold for Oil Policy in November last year as an innovative measure to exchange gold for petroleum products instead of US Dollars.

The Government said the move was intended to reduce the demand for dollars for the importation of petroleum products and by extension reduce the rate of depreciation of the Cedi.

It is estimated that the country required about $400m to import petroleum products monthly – out of which the Bank of Ghana is able to supply only $120m to petroleum importers.