Fuel Prices Have Dropped 42% Since The Introduction Of G4O Programme-Akufo-Addo
President Akufo-Addo has attributed the declining prices of petroleum products in recent times to the introduction of the Gold for oil programme(G4O) by his government to ameliorate the surging prices of petroleum products in the country.
In his 2023 State of the Nation Address (SONA ) in Parliament on March 8, he outlined the impact the programme has had on the prices of petroleum products since its introduction.
“The average price of petrol at the pump, which had risen to twenty (20) cedis a litre, in the middle of December 2022, is now thirteen cedis and eighty pesewas (GH¢13.80) a litre. The price of diesel had risen to more than twenty-three cedis and seventy pesewas (GH¢23.70) a litre and is now selling on average at thirteen cedis and eighty pesewas (GH¢13.80) a litre, which is a reduction of almost ten cedis a litre,” he explained.
The President said in addition to his government’s engagement with the IMF, they are also seeking and implementing some original and innovative ideas to try to solve the problem of the surging prices of petroleum products.
“For example, the Gold Purchase Programme by the Bank of Ghana and the Gold for Oil Policy are creative uses of our resources, which are already bearing fruit. These policies are aimed at achieving two results that are critical to the health of our economy. Firstly, they will help us preserve foreign exchange, especially the US dollar, and secondly, they will enable us to stabilise the price of oil products such as petrol and diesel on the domestic market. We have already seen some success on both fronts with the price of US dollars and petroleum products falling since we announced the policy and began to implement it.
According to the President, he expects this trend of falling fuel prices to reflect soon in the daily lives of Ghanaians.
“We expect this trend of falling fuel prices to reflect soon in our daily lives since transport fares affect the price of everything. I hope the trend of prices going up and coming down becomes a regular feature of our retail economy as is being demonstrated in the fuel prices. Because, as we all know, prices, especially of petroleum products, used only to go up in our country,” he said.
The G4O Programme is an initiative of the Government of Ghana to use the existing Bank of Ghana (BoG) Domestic Gold Purchase (DGP) Programme to support the import of petroleum products into Ghana.
Background
The prime objective of the Gold for oil programme is to use additional foreign exchange resources from the BoG’s DGP programme to provide foreign currency for the importation of petroleum products for the country which currently stands at about USD350 million per month.
For suppliers willing to take gold in direct exchange for petroleum products, BoG will provide the equivalent volume of gold. Both the Bank and the International Oil Trading Companies (IOTCs) are required to open Gold Metal Accounts in a mutually agreed gold refinery for the purpose of the gold transfer.
To ensure that the price of petroleum products imported under the G4O programme reflects at the pumps to benefit the consumer, the NPA will regulate the prices of these products in the interim to correct market failure until the policy matures.
NPA will work with BOST to negotiate prices with international oil traders to ensure that the landed cost of products procured under the programme is always competitive. NPA will approve the IOTC that will be selected to supply products to BOST under the programme based on the competitiveness of the offers made by them. BOST will sign supply contracts only after approval has been granted by the NPA.