Gold-to-oil: Government spends $40m on first shipment – NPA
The National Petroleum Authority (NPA) announced that the initial 40,000 tons of diesel that arrived in January under the Gold policy for oil is worth $40 million.
The clarification by the NPA came after several calls by industry experts including the Energy Securities Institute for the government to provide details of how much was spent on the initial consignment.
In a statement, the NPA added that it will implement measures to ensure that OMCs that lift the products provided under the program pass the price to consumers.
“In this regard, BIDEC and OMC that pick up and supply G4O products will sell at the ex-refinery and ex-pump prices that will be determined by the NPA. will be calculated using a weighted average.
Below is the full statement from the NPA
COMPLETE IMPLEMENTATION OF THE GOLD PROGRAM FOR OIL
1. The implementation of the government’s Gold for Oil (G4O) program begins with the arrival of the first shipment of approximately 40,000 metric tons of diesel on January 15, 2023, valued at approximately US$40 million.
2. The main objective of the program is to use additional foreign exchange resources from the Domestic Gold Purchase (DGP) program of the Bank of Ghana to provide foreign currency for the importation of petroleum products for the country which is currently about US$ 350 million per month. .
3. Payment for oil supplies must be made through two channels: through barter trade where gold is exchanged for oil or through brokerage channels where gold is converted into cash and paid to suppliers.
4. The first consignment of 40,000 metric tons of diesel is about 10 percent of the country’s combined monthly demand for gasoline and diesel.
5. The plan is to gradually increase imports according to G4O to about 50 percent of the total demand for gasoline and diesel by March 2023.
6. The implementation of G4O will reduce the pressure on the dollar (the currency used to import petroleum products) and avoid an increase in the price of petroleum due to the depreciation of the cedi against the dollar.
7. The program will ensure that the cost of importing products from international oil traders is lower.
8. The resulting reduction in foreign exchange pressure and premiums imposed by international oil traders as well as gaining efficiency from the value chain will affect the price of used pumps in the country.
9. To ensure that the price of petroleum products imported under the G4O program shows at the pump for the benefit of consumers, the National Oil Authority (NPA) will manage the price of the product in the meantime until the volume increases significantly.
10. NPA will work with Bulk Oil Storage and Transportation Company Limited (BOST) to negotiate prices with international oil traders to ensure that the cost of landing products sold under the program is always competitive.
11. The price BOST will sell the product to the Bulk Import, Distribution, and Export Company (BIDEC) will be approved by the NPA. The price at which BIDEC will sell the product to the Oil Marketing Company (OMC) will also be approved by the NPA.
12. The exchange rate applicable to the price of products supplied under G4O will be based on the average rate at which gold is purchased from gold exporters licensed by the BoG. BoG usually buys gold collected by the Precious Minerals Marketing Company (PMMC)
13. The NPA will implement measures to ensure that the OMCs that pick up the products provided in the G4O program pass on the prices to the consumers. In this regard, BIDEC and OMC that lift and supply G4O products will sell at ex-refinery and ex-pump prices to be determined by the NPA. If there should be a large number of products supplied according to G4O and other sources, the prices of used refineries and used pumps will be calculated using a weighted average.
14. All BIDECs and OMCs who wish to purchase products in the G4O program will be required to sign a pledge confirming their willingness to comply with the terms and conditions to participate in the purchase and sale of G4O products.
Gold-to-oil shipment: Government spends $40m on first shipment – NPA appeared first on Citinewsroom – Comprehensive News in Ghana.
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