Gold for Oil Programme has lowered ex-pump petroleum prices and provided stability in FX markets – BOG – Skyy Power FM

The Governor of the Central Bank of Ghana, Dr Ernest Addison says, the Gold for Oil Programme (G4O) has lowered ex-pump petroleum prices and provided some stability in the FX markets.

Speaking at the 2023 Ghana Mining Expo in Sekondi-Takoradi of the Western Region on Friday, July 14, the governor said since its inception, the G4O has yielded significant results. Specifically, it has provided foreign exchange resources to meet petroleum products importation, leading to increased competition among market players.

The Governor said these positive developments have contributed to easing price pressures and thereby supporting the central bank’s efforts to bring down the high inflation levels.

Dr Addison said the G4O is structured such that gold is purchased mainly through the PMMC from licensed small-scale miners and Community Mining Schemes to support the importation of petroleum products.

He noted that the introduction of the G4O was critical during the recent economic crisis, especially in the last quarter of 2022.

He said, “The Crisis affected the foreign exchange market and led to very large adjustments in the exchange rate and distorted forward exchange rate quotes which were used to price petrol.”

“Government intervention to directly engage oil producers became critical in obtaining cheaper fuel from G4O arrangements. It became clear that leveraging the BoG Gold for Reserves programme to support investment in oil would help. At the time, domestic ex-pump petroleum prices were changing rapidly with associated upward adjustments in transport costs, due mainly to the sharp currency depreciation and rising headline inflation.”

He further noted that Ghana has made sustained efforts and remains committed to addressing the menace associated with unlicensed miners who violate sustainable mining practices.

It is their expectation that as the benefits of the DGP programme become tangible to all the players in the value chain, activities of these illegal operators will be reduced or made to align with responsible mining practices as the economic and legal costs of operating outside the Law will be prohibitively expensive.

He said, “It is worth noting that the Ministry of Land and Natural Resources and other key stakeholders are collaborating to formalize activities in the ASM sector.”