Gold for Oil second consignment of 40,000 tonnes arrives

Ghana has received the second shipment of 40,000 metric tonnes of petroleum under the Gold-for-Oil scheme.

Ghanatodayonline.com has been informed that it landed at the Tema port on Sunday (February 19, 2023).

The first shipment that arrived under the new policy was likewise 40,000 tonnes.

Dr. Mahamudu Bawumia, the vice president, had declared that the government will enter a “Gold for Oil” agreement to rationalize the import of petroleum products, including the implications for foreign exchange.

Four different gasoline cargoes will be delivered by the end of February, according to information provided last week by Edwin Provencal, Managing Director of Bulk Oil Storage and Transportation Ltd (BOST).

In addition to the initial supply of 40,000 tonnes of gasoline under the agreement, the subsequent shipments will total 155,000 tonnes of fuel.

Vice President Dr. Mahamudu Bawumia unveiled a new government initiative known as “Gold for Oil” last year (G4O).

According to the government’s explanation of the policy, the government is permitted to pay for imported oil goods using gold in a direct barter with gold that the Central Bank has already acquired.

The Vice President explained the move as an intervention to help stabilize fuel product prices as well as reduce pressure on Ghana’s foreign exchange since the direct gold barter would be the mode of paying for imported oil instead of depleting the foreign exchange reserve. The move was announced in the midst of the depreciation of the cedi against the US dollar and the rising cost of fuel.

Since then, the Gold for Oil initiative has been put into action, and the first shipment of oil arrived last month.

Payment for the provision of oil is made through one of two channels: barter trade or currency earned by selling gold to a broker, according to the government’s G40 Plan Framework, dated February 3, 2023, which describes the strategy.

The Bank of Ghana (BoG) will offer suppliers using the Barter Channel with the comparable amount of gold if they are ready to accept it in direct exchange for petroleum products.

Source: Ghanatodayonline.com