According to Edwin Provencal, the Managing Director of Bulk Oil Storage and Transportation (BOST) company, some private Bulk Distribution Companies (BDCs) have been importing petroleum products at cheaper rates than under the government’s gold-for-oil program.
This program was initiated by the government as a response to the recent depreciation in the value of the cedi against major international trading currencies, and the government’s inability to raise loans on the international markets, leading to a sharp fall in the country’s foreign exchange reserves.
However, the Chamber of Bulk Oil Distributors (CBOD), the representative body of the BDCs, has pointed out that the gold-for-oil program has produced an unintended consequence, whereby the BDCs are not getting the foreign exchange they need from the central bank to import petroleum products at competitive rates.
The Chief Executive of CBOD, Dr. Patrick Kwaku Ofori, has argued that if members of the chamber received almost the same preferential treatment as BOST is receiving under the gold-for-oil program, they could help ensure energy security and a lowering of petroleum prices at the pump.
Speaking to Accra-based Oman FM, the Managing Director of BOST confirmed that BDCs are landing products at cheaper rates and at more competitive pricing than BOST is able to, even though government guarantees BOST’s forex allocation and underwrites its trading risks.
“In the last three weeks, BOST has brought in products at about $50 per barrel while some BDCs have brought in products at almost $45 per barrel.”
The efforts of the BDCs, he added, “have provided opportunities for BOST to negotiate competitive prices for oil imports under the gold-for-oil program.”
Dr. Patrick Ofori, who also spoke on the same programme welcomed Mr. Provencal’s admission of the BDCs’ contributions but lamented the reduction in forex allocations to the BDCs from the Bank of Ghana.
He also warned that the preferential treatment BOST is receiving threatens the financial viability of most BDCs.
Mr. Provencal further defended the gold-for-oil program by suggesting that the preferential treatment BOST is receiving is only a temporary intervention to deal with the forex exchange and debt crises confronting the country, and that once the crises are resolved, normalcy will be restored by allowing market forces to prevail again.