In addition, the NPA will work with the Bulk Oil Storage and Transportation (BOST) Company Limited to negotiate prices with international oil traders to ensure that the landed cost of products procured under the programme is always competitive.

A statement from the NPA said the price at which BOST would sell the products to bulk import, distribution and export companies (BIDECs) would be approved by the NPA, and that “the price at which the BIDECs will sell the products to oil marketing companies (OMCs) will also be approved by the NPA”.

Exchange rate

“The applicable exchange rate for pricing the products supplied under G4O will be based on the average rate at which the gold was purchased from licensed gold exporters by the BoG.

“The BoG ordinarily purchases the gold aggregated by the Precious Minerals Marketing Company (PMMC).

“The NPA will put measures in place to ensure that OMCs that lift products supplied under the G4O programme pass the price on to consumers accordingly. In this respect, BIDECs and OMCs which lift and supply G4O products will sell at the ex-refinery and ex-pump prices that will be determined by the NPA. If there must be co-mingling of products supplied under G4O and other sources, the ex-refinery and ex-pump prices will be computed using a weighted average.

“All BIDECs and OMCs which wish to purchase products under the G4O programme will be required to sign an undertaking confirming their willingness to comply with the terms and conditions for partaking in the purchase and sale of G4O products,” the statement said.

Implementation

The implementation of the government's G4O programme commenced with the arrival of the first consign­ment of about 40,000 metric tonnes of diesel on January 15, 2023, valued about $40 million.

The prime objective of the programme is to use additional foreign exchange resources from the BoG's domestic gold purchase (DGP) programme to provide foreign currency for the importation of petroleum products for the country, which currently stands at about US$350 million per month.

Under the initiative, the payment for oil supply is to be done in two channels: by way of barter trade, where gold is exchanged for oil, or via broker channel, where the gold is converted into cash and paid to the supplier.

Consignment

The statement said the first consignment of 40,000 metric tonnes of diesel constituted about 10 per cent of the country’s combined monthly demand for petrol and diesel, and that the plan was to gradually increase imports under G4O to constitute about 50 per cent of its total demand of petrol and diesel by March 2023.

“The implementation of the G4O will ease pressure on the dollar (the currency used for the importation of petroleum products) and avoid the occasional increases in petroleum prices resulting from the depreciation of the cedi against the dollar.

“The programme will ensure that the cost of importing the products from international oil traders will be comparatively cheaper,” it said, adding that “the consequent reduction in foreign exchange pressures and premiums charged by international oil traders, as well as efficiency gains from the value chain, will lead to lower ex-pump prices in the country”.