Decrease in fuel prices: Gold-for-oil not a factor - COPEC

The Head of Research and Training at COPEC, Paul Ofori, has stated that the gold for oil policy has no effect on the reduction of fuel prices in the country.

He said this following the drop in fuel prices predicted by the government.

In November 2022, the government announced plans to buy oil products with gold rather than US dollars.

Vice President Dr. Mahamudu Bawumia said that the move was meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which was weakening the local cedi and increasing living costs.

“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” Dr. Bawumia said.

He also said that using gold would stop the exchange rate from having a direct effect on fuel or utility prices, since sellers in the United States would no longer need foreign currency to buy oil products from other countries.

On Monday, February 27, 2023, COPEC revealed that the price of fuel is expected to decrease by March.

According to COPEC, petrol and diesel prices on the world market have reduced, hence Ghana’s quest to reduce fuel prices from March 1.

Speaking on Atinka TV’s morning show, Ghana Nie with Ama Gyenfa Ofosu Darkwa, Mr. Paul Ofori explained that, “When the cedi stabilizes, it pushes for the prices to also come down.”

Secondly, when the world price comes down, it helps reduce the price. “But if we talk about gold for oil, gold for oil is not accounting for the drop in the price of fuel at the pumps.”

He continued, “The first consignment that came was about 40,000 metric tons; it was only diesel; petrol was not part of it. And our daily consumption is approximately 11,500. And the 40,000, how long will it last?” We use about 11,500 a day, and you brought 40,000, so when you compare it, it is just about four to five days, and the impact is very low, such that it will not bring any change at the pumps, and so the gold for oil, in as much as we were praying that the consumers at the end of the day will be the beneficiaries, or get prices that are very low, it is not this gold for oil that will make the prices at the pumps low."

Mr. Paul Ofori also stated that only a few oil marketing companies had access to the 40,000 metric tons, adding that those without 45 fuel stations would not benefit.

“We are not against any policy the government will bring to support the consumer; however, it should be a policy that will inure to the benefit of the consumer and that will inure to the benefits of the country, but when you look at this policy, with all truth, secrecy, or the level of opaqueness in the policy, it tells you the policy will not benefit the consumer or bring any profit to the nation to help the consumer,” he said.