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Deputy minister for energy William Owuraku Aidoo has told parliament that Ghana’s Gold-for-oil contract agreement is between the Bulk Oil Storage and Transportation Company Limited(BOST) and suppliers of petroleum products.
He explained that they are spot contracts which involve the purchase or sale of the commodity for quick delivery at the current or prevailing market price termed as the spot price.
The deputy minister for energy’s explanation follows a question posed to the ministry by the MP for Cape Coast South, George Kweku Ricketts-Hagan.
Responding, he explained that Ghana’s Gold-for-oil contract agreement is between the Bulk Oil Storage and Transportation Company Limited(BOST) and suppliers of petroleum products.
Last year, the Vice President, Dr. Mahamudu Bawumia announced a new government policy dubbed Gold for Oil (G4O).
The policy, as explained by the government, is to allow the government to pay for imported oil products with gold, in a direct barter with gold purchased by the Central Bank.
The move, announced by the Vice President in the midst of the depreciation of the cedi against the US dollar and the rising cost of fuel prices, was explained as an intervention to help stabilise prices of fuel products, as well as reduce pressure on Ghana’s foreign exchange, as the direct gold barter would be the mode of paying for imported oil instead of depleting the foreign exchange reserve.
The Gold for Oil programme has since been implemented with the first oil consignment arriving last month.
According to the government’s G40 Programme Framework dated February 3, 2023, which explains the policy, payment for the oil supply is done in two channels; barter trade or via forex obtained from selling gold to a broker.
Under the Barter Channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana (BoG).
In a follow up question, the MP further sought to know the contract’s advantages to the country and spot price use in the exchange.
Also,former minority leader Haruna Iddrisu additionally sought to know if it’s an economic transaction on behalf of the state taking into recognition what the constitution says on such transactions.
However, he was rebated by deputy majority leader, Alexander Afenyo Markin who had debated that an interpretation has already been given by the Supreme Court.
That notwithstanding, the Tamale south legislator called that the needful be done.
Story by Mary Quartey – Parliamentary Desk
