Gold for oil: Oil was bought at a premium not a discount – John Jinapor

A ranking member of the Mines and Energy Committee of Parliament, John Jinapor, has stated that the gold for oil was not bought at a discount but at a premium.

According to him, buying at a premium will mean that the fuel will not be as cheap as it has been perpetuated by the government.

Speaking to Citi News, he said “In fact, the information I have is that the oil they bought is at a premium and not at a discount. So, this narrative that they are going to get cheap oil somewhere is not true. Let me state that there is nothing like cheap oil when it comes to the international oil market. On the contrary, this deal is leading to a premium in terms of pricing.”

John Jinapor however explained that the fuel being bought by the government is not enough for the Ghanaian market and it may not be a cheap source to be able to deal with the increasing fuel prices.

“The notion that fuel prices will go down is not true. The other side is that the diesel covers only 25% of our requirement and you see that is not even enough to change the price,” he said.

John Jinapor also called on the government to halt the programme for broader consultations to be held.

Meanwhile, the Head of financial markets at the Bank of Ghana, Stephen Opata, has confirmed that the first consignment from the gold for oil policy is already being sold to the bulk oil distributing companies.

He noted that even though the prices are lower than the ex-pump prices, the impact will not be felt since it is just about 20% of the country’s market needs.

“The product was cleared from the ports today and I know that BOST has started selling. This is just 20% of our market needs from the numbers I have seen the prices are better than what is at the ex-pump prices right now.

“Because this is just 20 percent of our needs, it will not make that much impact as it would if we were to be doing 100 percent of our diesel needs,” he was quoted by myjoyonline.com.

The first consignment of the oil from the gold for oil policy arrived in Ghana on Monday, January 16, 2023.

The 41,000 metric tons of oil from the United Arab Emirates was however discharged to Bulk Oil Storage and Transportation (BOST).

The move is part of the government’s efforts to curb high fuel prices and the lack of enough dollars to purchase oil from the international market.

SSD/FNOQ