The first consignment of the gold for oil policy by the government to stem the increasing depreciation of the cedi against the major currencies has arrived at the Tema Port and discharged into the receptacles of Bulk Oil Storage and Transportation Company (BOST).
The 41,000 metric tonnes of the petroleum products delivered by SCF YENISEI will be sold by BOST to bulk distributing companies (BDCs) around Ghana, according to the state-owned Daily Graphic.
Valued at US$40 million, it was brokered by the economic management team led by Vice-President Dr Mahamudu Bawumia.
In November 2022, the government announced plans to buy oil products with gold rather than US dollars.
Vice-president Bawumia said that the move was meant to tackle dwindling foreign currency reserves coupled with demand for dollars by oil importers, which was weakening the local cedi and increasing living costs.
“It will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency,” Bawumia said.
He added that using gold would prevent the exchange rate from directly impacting fuel or utility prices as domestic sellers would no longer need foreign exchange to import oil products.
According to a Graphic Online source associated with the process, the first consignment cost $40 million worth of gold.
The source said BOST would sell the product to the BDCs, proceeds paid to an escrow account at the Bank of Ghana for the procurement of gold for the process.
Other members of the team that worked for the operationalisation of the move are the ministers for Energy, Lands and Natural Resources, Governor of the Bank of Ghana, the Chamber of Mines, the Precious Mineral Marketing Company (PMMC) and BOST.