Gold-for-oil: Chamber of Bulk Oil Distributors call for fair competitive environment

The Ghana Chamber of Bulk Oil Distributors (CBOD) has called on government to create an enabling environment that would ensure bulk distribution companies compete fairly in the gold for oil (G4O) programme.

According to Chamber, the Bank of Ghana (BoG) underwriting the risks associated with commercial activities of the Bulk Oil Storage and Transportation company (BOST), gives the government sole shareholder private limited liability company, an upper hand over other players in the field.

In a virtual press briefing on Thursday, Dr Patrick Ofori, Chief Executive Officer (CEO) of CBOD, said the Chamber was concerned about the “preferential treatment that BOST is receiving in the form of skewed lay cans and forex allocation.”

That, he said “could distort the markets and potentially impose a financial burden on an already stressed economy and future additional petroleum taxes similar to Energy Sector Levy Act (ESLA) and Tema Oil Refinery (TOR) levy.”

“What we are saying is that they (the government) should create the enabling environment for everybody to compete fairly and on their own strength and private sector participation is not well respected,” Dr Ofori said.

However, he said the Chamber was not against the government’s gold for oil programme as well as the involvement of BOST in managing strategic petroleum stocks within the downstream petroleum sector.

“We don’t want a situation where lay cans [the schedule for the berthing of petroleum-carrying vessels at the ports] are skewed in favour of BOST. They (BOST) should not be protected using state entities and in the end, try and claim efficiency based on state steroids,” he said.

“We are not against G4O. Neither are we against BOST engaging in their core mandate of managing strategic petroleum stocks, but want a level playing field for us to operate efficiently and carry out our businesses,” he added.

Dr Ofori remarked that the Chamber’s push for a level playing field was to help ensure the sustainability and profitability of the downstream petroleum sector and safeguard Ghana’s energy efficiency and security.

Announced in November 2022, the Gold for Oil Programme is a government policy initiative to trade gold for petroleum products, to reduce the importation of the products into the country and help address the challenges of cedi depreciation.

The Vice President, Dr Mahamudu Bawumia, in March this year indicated that the programme, apart from ensuring stability in fuel prices and the cedi, would save Ghana some $4.8 billion annually.

Under the policy, BoG in collaboration with Precious Minerals Marketing Company, through BOST, is to purchase petroleum products with gold, while allowing BOST to store and distribute them to Oil Marketing Companies (OMCs).

This was to be done after the National Petroleum Authority (NPA) has regulated the pricing regime and deemed it fit for the market.