Ghana: Former MiDA COO Appointed Acting ECG MD
A former Chief Operating Officer (COO) of the Millennium Development Authority (MiDA), Mr Julius Kpekpena, has been appointed by President John Dramani Mahama as acting Managing Director (MD) of the Electricity Company of Ghana (ECG).
He replaces Ing. David Asamoah who served as acting MD from September 2024 following the resignation of Samuel Dubik Mansubir Mahama Esq.
Kpekpena comes to the position with several years of experience in the power sector.
Before joining MiDA in May 2015, he was the Director of Engineering at ECG between June 2009 and April 2015.
He was part of the MiDA team that successfully executed the Ghana Power Compact II where major electricity infrastructures were executed, including four major Bulk Supply Points (BSP), namely Pokuase, Kasoa, Kanda and University of Ghana BSP.
The former COO of MiDA holds a master’s degree in Energy Management from BI Norwegian Business School and B.Sc. Electrical and Electronic Engineering from the Kwame Nkrumah University of Science and Technology (KNUST).
This portal understands that Mr Kpekpena officially assumed post on Tuesday, 11th February 2025, after Mr David Asamoah had handed over to him.
Mr Kpekpena is stepping in at a time when the new administration is revisiting the Private Sector Participation (PSP) in the management of ECG after a similar plan had failed under the immediate past Akufo-Addo administration.
Last month, the new Minister for Energy and Green Transition, John Abdulai Jinapor, inaugurated a committee to consult widely and develop a framework for the ECG PSP.
The committee was given up to one month to present its report.
Source: https://energynewsafrica.com
Ghana: VRA, Nuclear Power Ghana Strengthen Ties For Energy Security
The Acting Chief Executive of the Volta River Authority (VRA), Ing. Edward Ekow Obeng-Kenzo, has emphasized the importance of collaboration between the VRA and Nuclear Power Ghana (NPG) to achieve energy security.
During a courtesy call on the management of NPG at their headquarters in Accra, Obeng-Kenzo stressed the need for deeper relations between the two entities.
Executive Director of NPG, Dr. Stephen Yamoah, welcomed the call for collaboration and expressed his desire for closer ties with the VRA in producing low-carbon energy to meet Ghana’s growing needs.
Obeng-Kenzo assured Yamoah of the VRA’s commitment to fostering close working relationships to enhance power generation.
As part of his outreach efforts, Obeng-Kenzo also paid a courtesy call on the Bui Power Authority, which houses NPG at BPA Heights. NPG was established in 2018 as the owner/operator of Ghana’s first proposed nuclear power plant and has been duly registered under the Companies Code of Ghana as a Limited Liability Company.
With its core staff drawn from the VRA, Bui Power Authority, and the Ghana Atomic Energy Commission, NPG is responsible for project development, feasibility studies, plant and site licensing, regulatory compliance, construction, and commissioning, ensuring that the plant operates in compliance with international best practices.
Source: https://energynewsafrica.com
Obeng-Kenzo assured Yamoah of the VRA’s commitment to fostering close working relationships to enhance power generation.
As part of his outreach efforts, Obeng-Kenzo also paid a courtesy call on the Bui Power Authority, which houses NPG at BPA Heights. NPG was established in 2018 as the owner/operator of Ghana’s first proposed nuclear power plant and has been duly registered under the Companies Code of Ghana as a Limited Liability Company.
With its core staff drawn from the VRA, Bui Power Authority, and the Ghana Atomic Energy Commission, NPG is responsible for project development, feasibility studies, plant and site licensing, regulatory compliance, construction, and commissioning, ensuring that the plant operates in compliance with international best practices.
Source: https://energynewsafrica.com The Gold For Oil Program: A Data Exploratory Analysis
By Edwin Alfred Nii Obodai PROVENCAL (PhD) & Emmanuel ABBEY (PhD)
In 2022, the government of Ghana introduced the Gold for Oil (G4O) program to address multiple economic objectives, mainly to stabilise fuel prices in the domestic market, reduce pressure on Ghana’s foreign exchange reserves and ensure a stable supply of petroleum products.
The program allows Ghana to exchange its gold reserves for imported petroleum products to reduce the excessive pressure on the demand for foreign currency for oil imports.
The program operates through a cyclical process involving key institutions: the Bank of Ghana (BoG), the Precious Minerals Marketing Company (PMMC), the National Petroleum Authority (NPA), the Bulk Oil Storage and Transportation Company (BOST) and the Bulk Oil Import, Distribution and Export Companies (BIDECS).
Under the program, BoG purchases gold in cedis and uses it to secure oil imports for BOST, which are then distributed through the domestic supply chain via the Bulk Distribution Companies (BDCs) to the market, thus bypassing the need for foreign currency ($). PMMC handles the gold acquisition and processing side, while BOST manages the oil importation, storage and distribution aspects of the initiative (see Figure 1 for a graphical representation of the cyclical process)
The Gold for Oil (G4O) program was intended to lessen the pressure on Ghana’s foreign exchange reserves and reduce the demand for dollars in the market. The program can thus be useful in stabilising the value of the Ghanaian cedi against major currencies, particularly the US dollar, by decreasing the country’s reliance on foreign currency for essential oil imports, which contributes almost 32% of Ghana’s imports (see Figure 2).
Using the pump prices of two oil marketing companies in the country – Goil and Star Oil, this report shows that the program has been successful in stabilising fuel prices, as the average price of petrol and diesel being quite lower during the program than before. Similarly, not much deviation was observed between the pump prices for diesel and petrol as well as the foreign exchange.
Motivation for the study
For over two years, the Gold for Oil (G4O) program has been the subject of ongoing debates among stakeholders, who question its effectiveness in stabilizing fuel prices and curbing the depreciation of the Ghanaian cedi, particularly against the U.S. dollar.
The primary motivation for this study is to address and resolve the ongoing debates and doubts surrounding the effectiveness of this innovative program. Additionally, since no academic research has been conducted on this or similar interventions, this study aims to contribute to the existing body of academic knowledge.
The theory behind the Gold for Oil (G4O) Program
It is instructive to note that Ghana is the first country to practice the Gold for Oil (G4O) program. The concept of exchanging gold for oil was, however, practised in response to the 1973 oil crisis (Birjandi, 2003).
The economics underpinning the programme is intuitive. A good starting point in justifying the relevance of the program is the emergence of the COVID-19 pandemic and the Russian- Ukraine conflict and their impact on the economy of Ghana with weak fundamentals.
These two global shocks significantly disrupted global supply chains with dire implications for food security, energy production and economic growth. This necessitated fiscal response from almost all countries in the world and particularly for Ghana, plunging the economy further into a debt distress situation.
This is not to say Ghana has not had issues with debt management, as there have been lingering issues with Ghana’s public debt, which has been soaring over time. The events implied a shrinking international reserve position for Ghana and loss of access to the international capital market. Coupled with declining reserves, this excessively affected the depreciation of the local currency in a country.
This triggered an inflation crisis because Ghana is dependent on imports for most of its critical supplies, especially petroleum products and inflation soared to 54% by November 2022. Certainly, there was a need to be innovative about addressing the inflation crisis and the excessive depreciation of the local currency.
It is not difficult to show that mineral fuels, oils and distillation products constitute a very high share of the country’s imports and have been one of the major drivers of the depreciation of the local currency. The pressure from these imports certainly has pass-through effects on energy prices and particularly inflation. Ghana needs almost US$4.8 billion annually to finance 100% of petroleum imports.
This is where the Gold for Oil (G4O) program becomes relevant if a huge chunk of this financing can be retained or replaced with Gold. Indeed, the 2023-2024 annual review of the Gold for Oil program showed the program imported 56 cargoes (1.84 million metric tons (MT) of products representing 30% market share over the period) at a cost of almost $2 billion. The rest of the market was served by the BDCs.
Theoretically, it is again not difficult to show that the determinants of petroleum prices in Ghana are shaped by a complex interplay of global, macroeconomic, and institutional factors. Key drivers include global crude oil prices, exchange rate volatility, taxes and regulatory levies, deregulation and subsidy policies, local refining capacity, inflation, market structure, cross-border smuggling, energy demand, and political factors.
Global oil prices directly impact import costs, while the depreciation of the Ghanaian cedi increases expenses. Limited local refining capacity forces reliance on expensive imports, and high inflation escalates operational costs.
The oligopolistic market structure, cross-border smuggling, and inconsistent policy implementation further complicate pricing dynamics. Addressing these multifaceted issues requires a comprehensive approach, including enhancing refining capacity, stabilising the currency, and implementing targeted subsidies to protect vulnerable populations
Have there been some gains from the G4O Programme?
To commence the commentary on whether there have been some gains or otherwise, we obtained data on the local pump prices for petrol and diesel from Goil and Star Oil starting from 1st November 2022 and ending on 3rd February 2025 (69 observations). A simple comparison of the average pump prices for these products is produced in Table 1.
It can be observed that the average pump prices for both diesel and petrol from the two OMCs were much lower during the periods of the Gold for Oil program (January 17, 2023) relative to the periods before. These differences were found to be statistically significant except the pump price for petrol from the Star Oil Company.
The average global price of petrol increased during the period that the government was undertaking the Gold for Oil program. The average global price of diesel, however, declined during the same period and came to $795.1.
We again computed several correlations between the foreign exchange and the different fuel prices (i.e. pump prices for Goil and Star oil as well as international prices). There are two important observations to be made from these correlations.
First, the correlation between the foreign exchange and local pump prices for petrol and diesel are all positive. For pump prices (Star and Goil), their correlations with foreign exchange are positive before G4O, indicating that as the cedi tended to weaken or depreciate, pump prices increased. These correlations are generally strong (0.76 to 0.87).
During G4O, these correlations are still positive, but the magnitude is smaller (0.57 to 0.66), suggesting that the relationship between pump prices and foreign exchange has weakened during G4O. This potentially indicates a stabilizing effect, where pump price increases are less strongly linked to cedi depreciation due to the anchoring of the forex by G4O.
Second, there is a striking change between foreign exchange and global market prices of diesel and petrol. Before G4O, there was a positive correlation. But during G4O, the correlations become negative. This suggests a shift where increases in global petrol/diesel prices are now associated with a strengthening of the Cedi.
A possible interpretation is that the G4O program may have somewhat stabilized the forex rate by reducing the demand for USD to import petroleum products. Intuitively, if the G4O program is pursued vigorously, when global prices rise, the forex rate may not be as strongly affected (as indicated by the decreased positive correlations for pump prices) or may even move in the opposite direction (as indicated by the negative correlations for global prices). Note here that the G4O program intends to create more forex availability and stability.
A look at the trends for foreign exchange and the local pump prices of both petrol and diesel somewhat confirms our initial findings. In the case of petrol prices (Figure 3), forex and petrol prices initially exhibited a similar trend (moving together), but over time, forex stabilises while petrol prices fluctuate.
The stabilization effect of forex is visible, aligning with the reduced correlation observed in Table 2. In the case of diesel prices (Figure 4), forex exhibits stability while fuel prices continue to respond to global market fluctuations.
The observed trend aligns with the negative correlation shift for global diesel prices in Table 2, reinforcing the idea that forex reacts differently to global fuel price movements under G4O.
Clearly, the G4O program seems to be effective in weakening the link between forex and fuel price volatility, potentially stabilizing the Cedi when global fuel prices increase.
A More Robust Evidence
As explained earlier, the transmission mechanism for the gold for oil programme is to ease the pressure on the demand for forex, which in turn is expected to result in the appreciation [1] of the Cedi against the Dollar and other major currencies.
The appreciation or reduction in the rate of depreciation will also lead to a reduction in pump prices of petrol and diesel, as the formula for calculating the pump price has the exchange rate depreciation embedded in it.
An understanding of how this practically occurred during the Gold for Oil programme is discussed by employing two techniques: the ordinary least squares (OLS) approach and a decomposition technique. The intention is to determine the effect of the policy on pump prices.
Using a dummy variable as a measure of the policy, we will attempt to establish an econometric link between the policy and pump prices. The period from the first lifting of oil under the policy is assigned the value 1 (i.e., January 17, 2023, to 3rd February 2025), and the period before the policy was assigned 0. This assists in ascertaining the effectiveness of the policy.
Table 3: OLS estimation of pump prices of petrol and diesel
Robust standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1
We initially conducted a pre-estimation test to establish the suitability of the data for econometric analysis. A unit root test was conducted using the Augmented Dickey-Fuller Test, and all the variables were found to be stationary. First, we test the relationship using OLS estimation techniques.
The results reveal that foreign exchange has had a positive and significant effect on pump price. What this means is that any depreciation of the Ghana Cedis is reflected in increased pump prices for diesel and petrol and vice versa.
Specifically, a one percentage depreciation of the Ghana Cedis resulted in a rise in pump prices of petrol by 0.44% and 0.56% in the case of Goil and Star Oil, respectively.
A similar finding exists for the prices of diesel advertised by the two oil marketing companies (0.53% and 0.456%, respectively).
The Gold for Oil dummy variable, which is our main variable of interest, is negatively related to pump prices of diesel for both Goil and Star Oil (see Table 1). This is a key finding related to the Gold for Oil (G4O) program.
The negative sign suggests that the introduction of the G4O policy is associated with a decrease in pump prices for both petrol and diesel at both Goil and Star Oil. The decline is more pronounced on the pump price advertised by Goil relative to that of Star Oil, while the effect of foreign exchange is relatively pronounced on Star Oil’s pump price compared to that of Goil.
Altogether, the policy accounted for almost 10 – 24% reduction in pump prices for petrol at the two oil marketing companies.
It is crucial to note that the exchange rate’s continued substantial influence implies that the G4O policy has not entirely protected the market from exchange rate volatility. This is comprehensible, as there are still components of the petroleum pricing mechanism that are susceptible to currency fluctuations.
The policy’s abandonment would result in the loss of these price reductions already realised. The most effective strategy is to enhance and refine the policy, address the remaining vulnerabilities, and investigate complementary measures to achieve greater stability in the petroleum market. It would be premature to abandon the policy.
The report also conducts a decomposition analysis to ascertain the policy’s contribution to the reduction in pump prices.
The results confirm our earlier findings that the average pump price for petrol and diesel at Goil Filling Stations was reduced, whereas the story is different for petrol prices at Star Oil. This implies that the Gold for Oil intervention significantly influenced the pump price of petrol and diesel sold by Goil.
Conclusion
In conclusion, the Gold for Oil (G4O) program in Ghana appears to have had a positive impact on stabilising fuel prices, particularly for Goil, as evidenced by the lower average pump prices during the program period compared to before. The Program is indeed a bold and innovative move.
The program’s innovative approach of swapping gold for imported petroleum products to bypass the need for foreign currency is a clear deviation from traditional methods. The gains observed showed that average pump prices were lower during the program compared to pre-G4O figures, which means the program is working.
There are even potential more gains against international fuel prices. This is because the G4O program can be effective in weakening the link between Forex and fuel price volatility, potentially stabilizing the Cedi when global fuel prices increase. This makes the program more worthwhile than a costly gamble.
The program has helped reduce Ghana’s reliance on foreign currency for oil imports, contributing to a more stable exchange rate. However, the exchange rate’s continued influence on pump prices suggests that the G4O policy has not fully insulated the market from currency volatility.
These findings imply that while the G4O program is a step in the right direction, further refinements are needed to enhance its effectiveness and address remaining vulnerabilities. Abandoning the policy prematurely would negate the price reductions already achieved.
A more strategic approach would involve strengthening the existing framework, exploring complementary measures to bolster stability in the petroleum market, and continuously monitoring and adapting the program to evolving economic conditions. This will ensure that Ghana can fully realise the benefits of its gold reserves in securing a stable and affordable fuel supply for its citizens.
2 Bibliography
Acheampong, T. (2022). A beginner’s guide to petroleum pricing in Ghana. Conversation (retrieved from https://theconversation.com/a-beginners-guide-to-petroleum-pricing-in-ghana-179402
Antwi, A. (2021). The impact of crude oil price changes on output, inflation, and the exchange rate in Ghana (Master’s thesis, Norwegian University of Life Sciences, Ås).
Anyars, S. I., & Adabor, O. (2023). The impact of oil price changes on inflation and disaggregated inflation: Insights from Ghana. Research in Globalization, 6, 100125.
Birjandi, H. S. (2003). Energy and globalization. Illinois State University.
[1] Appreciation of the Cedi refers to the rise in value of the Cedi against the Dollar and depreciation is fall in value.
The Gold for Oil (G4O) program was intended to lessen the pressure on Ghana’s foreign exchange reserves and reduce the demand for dollars in the market. The program can thus be useful in stabilising the value of the Ghanaian cedi against major currencies, particularly the US dollar, by decreasing the country’s reliance on foreign currency for essential oil imports, which contributes almost 32% of Ghana’s imports (see Figure 2).
Using the pump prices of two oil marketing companies in the country – Goil and Star Oil, this report shows that the program has been successful in stabilising fuel prices, as the average price of petrol and diesel being quite lower during the program than before. Similarly, not much deviation was observed between the pump prices for diesel and petrol as well as the foreign exchange.
Motivation for the study
For over two years, the Gold for Oil (G4O) program has been the subject of ongoing debates among stakeholders, who question its effectiveness in stabilizing fuel prices and curbing the depreciation of the Ghanaian cedi, particularly against the U.S. dollar.
The primary motivation for this study is to address and resolve the ongoing debates and doubts surrounding the effectiveness of this innovative program. Additionally, since no academic research has been conducted on this or similar interventions, this study aims to contribute to the existing body of academic knowledge.
The theory behind the Gold for Oil (G4O) Program
It is instructive to note that Ghana is the first country to practice the Gold for Oil (G4O) program. The concept of exchanging gold for oil was, however, practised in response to the 1973 oil crisis (Birjandi, 2003).
The economics underpinning the programme is intuitive. A good starting point in justifying the relevance of the program is the emergence of the COVID-19 pandemic and the Russian- Ukraine conflict and their impact on the economy of Ghana with weak fundamentals.
These two global shocks significantly disrupted global supply chains with dire implications for food security, energy production and economic growth. This necessitated fiscal response from almost all countries in the world and particularly for Ghana, plunging the economy further into a debt distress situation.
This is not to say Ghana has not had issues with debt management, as there have been lingering issues with Ghana’s public debt, which has been soaring over time. The events implied a shrinking international reserve position for Ghana and loss of access to the international capital market. Coupled with declining reserves, this excessively affected the depreciation of the local currency in a country.
This triggered an inflation crisis because Ghana is dependent on imports for most of its critical supplies, especially petroleum products and inflation soared to 54% by November 2022. Certainly, there was a need to be innovative about addressing the inflation crisis and the excessive depreciation of the local currency.
It is not difficult to show that mineral fuels, oils and distillation products constitute a very high share of the country’s imports and have been one of the major drivers of the depreciation of the local currency. The pressure from these imports certainly has pass-through effects on energy prices and particularly inflation. Ghana needs almost US$4.8 billion annually to finance 100% of petroleum imports.
This is where the Gold for Oil (G4O) program becomes relevant if a huge chunk of this financing can be retained or replaced with Gold. Indeed, the 2023-2024 annual review of the Gold for Oil program showed the program imported 56 cargoes (1.84 million metric tons (MT) of products representing 30% market share over the period) at a cost of almost $2 billion. The rest of the market was served by the BDCs.
Theoretically, it is again not difficult to show that the determinants of petroleum prices in Ghana are shaped by a complex interplay of global, macroeconomic, and institutional factors. Key drivers include global crude oil prices, exchange rate volatility, taxes and regulatory levies, deregulation and subsidy policies, local refining capacity, inflation, market structure, cross-border smuggling, energy demand, and political factors.
Global oil prices directly impact import costs, while the depreciation of the Ghanaian cedi increases expenses. Limited local refining capacity forces reliance on expensive imports, and high inflation escalates operational costs.
The oligopolistic market structure, cross-border smuggling, and inconsistent policy implementation further complicate pricing dynamics. Addressing these multifaceted issues requires a comprehensive approach, including enhancing refining capacity, stabilising the currency, and implementing targeted subsidies to protect vulnerable populations
Have there been some gains from the G4O Programme?
To commence the commentary on whether there have been some gains or otherwise, we obtained data on the local pump prices for petrol and diesel from Goil and Star Oil starting from 1st November 2022 and ending on 3rd February 2025 (69 observations). A simple comparison of the average pump prices for these products is produced in Table 1.
It can be observed that the average pump prices for both diesel and petrol from the two OMCs were much lower during the periods of the Gold for Oil program (January 17, 2023) relative to the periods before. These differences were found to be statistically significant except the pump price for petrol from the Star Oil Company.
The average global price of petrol increased during the period that the government was undertaking the Gold for Oil program. The average global price of diesel, however, declined during the same period and came to $795.1.
We again computed several correlations between the foreign exchange and the different fuel prices (i.e. pump prices for Goil and Star oil as well as international prices). There are two important observations to be made from these correlations.
First, the correlation between the foreign exchange and local pump prices for petrol and diesel are all positive. For pump prices (Star and Goil), their correlations with foreign exchange are positive before G4O, indicating that as the cedi tended to weaken or depreciate, pump prices increased. These correlations are generally strong (0.76 to 0.87).
During G4O, these correlations are still positive, but the magnitude is smaller (0.57 to 0.66), suggesting that the relationship between pump prices and foreign exchange has weakened during G4O. This potentially indicates a stabilizing effect, where pump price increases are less strongly linked to cedi depreciation due to the anchoring of the forex by G4O.
Second, there is a striking change between foreign exchange and global market prices of diesel and petrol. Before G4O, there was a positive correlation. But during G4O, the correlations become negative. This suggests a shift where increases in global petrol/diesel prices are now associated with a strengthening of the Cedi.
A possible interpretation is that the G4O program may have somewhat stabilized the forex rate by reducing the demand for USD to import petroleum products. Intuitively, if the G4O program is pursued vigorously, when global prices rise, the forex rate may not be as strongly affected (as indicated by the decreased positive correlations for pump prices) or may even move in the opposite direction (as indicated by the negative correlations for global prices). Note here that the G4O program intends to create more forex availability and stability.
A look at the trends for foreign exchange and the local pump prices of both petrol and diesel somewhat confirms our initial findings. In the case of petrol prices (Figure 3), forex and petrol prices initially exhibited a similar trend (moving together), but over time, forex stabilises while petrol prices fluctuate.
The stabilization effect of forex is visible, aligning with the reduced correlation observed in Table 2. In the case of diesel prices (Figure 4), forex exhibits stability while fuel prices continue to respond to global market fluctuations.
The observed trend aligns with the negative correlation shift for global diesel prices in Table 2, reinforcing the idea that forex reacts differently to global fuel price movements under G4O.
Clearly, the G4O program seems to be effective in weakening the link between forex and fuel price volatility, potentially stabilizing the Cedi when global fuel prices increase.
A More Robust Evidence
As explained earlier, the transmission mechanism for the gold for oil programme is to ease the pressure on the demand for forex, which in turn is expected to result in the appreciation [1] of the Cedi against the Dollar and other major currencies.
The appreciation or reduction in the rate of depreciation will also lead to a reduction in pump prices of petrol and diesel, as the formula for calculating the pump price has the exchange rate depreciation embedded in it.
An understanding of how this practically occurred during the Gold for Oil programme is discussed by employing two techniques: the ordinary least squares (OLS) approach and a decomposition technique. The intention is to determine the effect of the policy on pump prices.
Using a dummy variable as a measure of the policy, we will attempt to establish an econometric link between the policy and pump prices. The period from the first lifting of oil under the policy is assigned the value 1 (i.e., January 17, 2023, to 3rd February 2025), and the period before the policy was assigned 0. This assists in ascertaining the effectiveness of the policy.
Table 3: OLS estimation of pump prices of petrol and diesel
| VARIABLES | Goil Petrol Price | Star Petrol Price | Goil Diesel Price | Star Diesel Price | ||||
| Exchange rate (GHC to $) |
|
0.555*** |
0.530*** | 0.564*** | ||||
|
(0.056) |
(0.055) |
|
|||||
| Global Price of Petrol |
|
0.169** | ||||||
|
(0.074) | |||||||
| Global Price of Diesel |
|
0.259*** | ||||||
|
|
|||||||
| Gold for Oil Dummy |
|
-0.104*** |
-0.270*** |
-0.239*** |
||||
|
(0.020) |
(0.027) |
|
|||||
| Constant |
|
0.092 |
-0.093 |
|
||||
|
(0.553) |
(0.583) |
(0.610) |
|||||
| Observations |
|
69 |
69 |
69 |
||||
| R-squared |
|
0.534 | 0.771 |
0.734 |
Conclusion
In conclusion, the Gold for Oil (G4O) program in Ghana appears to have had a positive impact on stabilising fuel prices, particularly for Goil, as evidenced by the lower average pump prices during the program period compared to before. The Program is indeed a bold and innovative move.
The program’s innovative approach of swapping gold for imported petroleum products to bypass the need for foreign currency is a clear deviation from traditional methods. The gains observed showed that average pump prices were lower during the program compared to pre-G4O figures, which means the program is working.
There are even potential more gains against international fuel prices. This is because the G4O program can be effective in weakening the link between Forex and fuel price volatility, potentially stabilizing the Cedi when global fuel prices increase. This makes the program more worthwhile than a costly gamble.
The program has helped reduce Ghana’s reliance on foreign currency for oil imports, contributing to a more stable exchange rate. However, the exchange rate’s continued influence on pump prices suggests that the G4O policy has not fully insulated the market from currency volatility.
These findings imply that while the G4O program is a step in the right direction, further refinements are needed to enhance its effectiveness and address remaining vulnerabilities. Abandoning the policy prematurely would negate the price reductions already achieved.
A more strategic approach would involve strengthening the existing framework, exploring complementary measures to bolster stability in the petroleum market, and continuously monitoring and adapting the program to evolving economic conditions. This will ensure that Ghana can fully realise the benefits of its gold reserves in securing a stable and affordable fuel supply for its citizens.
2 Bibliography
Acheampong, T. (2022). A beginner’s guide to petroleum pricing in Ghana. Conversation (retrieved from https://theconversation.com/a-beginners-guide-to-petroleum-pricing-in-ghana-179402
Antwi, A. (2021). The impact of crude oil price changes on output, inflation, and the exchange rate in Ghana (Master’s thesis, Norwegian University of Life Sciences, Ås).
Anyars, S. I., & Adabor, O. (2023). The impact of oil price changes on inflation and disaggregated inflation: Insights from Ghana. Research in Globalization, 6, 100125.
Birjandi, H. S. (2003). Energy and globalization. Illinois State University.
[1] Appreciation of the Cedi refers to the rise in value of the Cedi against the Dollar and depreciation is fall in value. Gambia Set To Inaugurate High-Voltage Infrastructure Project On February 20
President Adama Barrow of The Republic of The Gambia will inaugurate a high-voltage infrastructure flagship project on February 20, 2025.
The project, undertaken by the National Water and Electricity Company under the Gambia Electricity Restoration and Modernization Project (GERMP), marks a significant milestone in the country’s journey toward a more improved and modernized energy sector.
The inauguration event, scheduled to take place at Salagi Forest, will be attended by development partners, including the World Bank Group, European Union, and European Investment Bank, as well as other invited guests and beneficiaries.
This modern Transmission and Distribution (T&D) infrastructure, including the National Control Center, will reduce frequent power cuts and low voltage issues by stabilizing the flow of electricity from primary sub-stations.
Additionally, the transmission and distribution systems within the GBA will enhance NAWEC’s capacity to deliver stable and efficient electricity to homes and businesses across the country.
Source: https://energynewsafrica.com
Kenya: Kenya Power Invests KSh.1 Billion To Boost Power Supply In Western Kenya
Kenya Power has announced an investment of nearly KSh.1 billion to expand electricity infrastructure in Western Kenya.
This move aims to enhance electricity connectivity and reliability for domestic and industrial consumers across 11 counties, including Kisumu, Homabay, Migori, Kisii, Nyamira, Siaya, Vihiga, Busia, Kericho, Bomet, and Kakamega.
According to Kenya Power’s Managing Director & CEO, Dr. (Eng.) Joseph Siror, the company is committed to providing quality and reliable electricity to drive economic growth.
“Our purpose is to supply adequate and reliable electricity to positively transform lives and support trade and manufacturing which play a crucial role in our country’s socio- economic development,” said Dr. Siror at the just concluded three-day Nyanza International Investment Conference in Kisumu County.
The investment covers both completed and ongoing projects.
One notable completed project is the Narok-Bomet 132kV link, which cost KSh.700 million and is expected to improve power reliability in South Nyanza and Western regions.
Ongoing projects include the construction of the Kibos-Miwani-Ahero and Kisian-Luanda 33kV link, which will improve power reliability and capacity in Kisumu South areas, at a cost of KSh.189 million.
Additionally, the construction of the 132kV line from Ndhiwa substation to Thur Dibuoro, expected to be completed by June 2025, will facilitate power evacuation from Sondu Miriu to South Nyanza, greatly improving power stability in the region.
Source: https://energynewsafrica.com
ONGC And Bp Sign Contract To Enhance Production From Mumbai High
Oil and Natural Gas Corporation Limited (ONGC) and bp have signed a contract under which bp will serve as the Technical Services Provider (TSP) for the Mumbai High field, India’s largest and most prolific offshore oil field.
ONGC will retain ownership and operational control of the field. Under the terms of the contract, bp will receive a fixed fee for a period of two years for its deployed personnel, followed by a service fee linked to incremental oil and gas production. bp will work in close collaboration with ONGC to stabilize the field’s current production decline and restore it to a robust growth trajectory.
Leveraging its extensive experience in managing some of the world’s largest oil fields, bp will optimize oil recovery at Mumbai High by conducting comprehensive reviews of sub-surface models, implementing system optimizations, and enhancing reservoir management practices.
This partnership is anticipated to significantly boost domestic oil and gas production, thereby increasing revenue for ONGC and benefiting the people of India, while also yielding higher service fee returns for bp.
“This opportunity further underpins our commitment to exploration and the production of oil and gas in India, creating value for both companies and helping support the country’s Kartikeya Dube, Head of Country and Chairman bp India
bp will assemble a team of technical experts to commence work by March 2025. In support of this initiative, both companies have already established a Senior Management Team and a Joint Management Team to ensure seamless project execution.
Honourable Minister of Petroleum and Natural Gas (MoPNG) Shri Hardeep Puri, in whose office the signing took place, said: “India’s quest towards energy self-sufficiency under the dynamic leadership of Hon’ble PM Narendra Modi Ji gets a massive boost as ONGC onboards its energy partner bp as Technical Service Provider for the Mumbai High Field, landmark field which has been providing energy security to us since 1974.
While ONGC continues to retain the ownership of the field, this unique technology collaboration with BP’s expertise in managing complex mature reservoirs and implementing advanced recovery technologies and best operational practices will help in enhancing the production from this iconic field.”
Reflecting on the strategic importance of the collaboration, Secretary, Ministry of Petroleum and Natural Gas, Government of India, Shri Pankaj Jain, said: “This strategic engagement represents a critical step in leveraging global best practices and cutting-edge technologies to optimize production at Mumbai High. I am confident that through this collaboration, we will reinforce our commitment to energy self-reliance and sustainable growth, ensuring a brighter future for India’s energy landscape.”
Shri Arun Kumar Singh, Chairman and CEO, ONGC, said “By engaging a TSP, ONGC aims to realize the enhanced potential of the Mumbai High field by leveraging cutting-edge technologies and global best practices, securing its future contribution to India’s energy landscape.”
Kartikeya Dube, Head of country and Chairman bp India said, “We are extremely proud and privileged to be selected as a partner by ONGC and look forward to bringing our international experience and technical expertise to the Mumbai High field.
This opportunity further underpins our commitment to exploration and the production of oil and gas in India, creating value for both companies and helping support the country’s vision for energy independence and security.”
Source: bp.com
Senegal-Mauritania Offshore Project To Ship First LNG Cargo In Q1
The Greater Tortue Ahmeyim (GTA) liquefied natural gas project offshore Mauritania and Senegal has achieved first LNG and the first cargo is expected to be lifted during the first quarter, one of the partners in the development said on Monday.
The GTA project, operated by BP in partnership with Kosmos Energy, has started delivering natural gas to the floating LNG vessel and liquefaction has begun, Kosmos Energy said in a statement.
On December 31, 2024, gas from the first phase of GTA started to flow from wells to the floating production storage and offloading (FPSO) vessel as part of the commissioning process.
BP has now given notice to the offtaker, BP Gas Marketing Ltd., for an LNG carrier to arrive later this quarter to export the first LNG cargo, Kosmos Energy said.
“We are looking forward to the accelerated ramp-up of LNG production and the first LNG cargo lifting during the first quarter,” Kosmos Energy chairman and chief executive officer Andrew G. Inglis commented.
The start-up of the project will benefit the economies of West African countries Senegal and Mauritania. It will also add LNG supply to the market as soon as this quarter, at a time when Europe is depleting its gas storage reserves and rushing to secure gas for the next winter.
The project has seen some delays in recent years as it was originally expected to come on stream in 2023.
The Greater Tortue Ahmeyim Phase 1 project will produce LNG from the massive natural gas find offshore Mauritania and Senegal in West Africa made in 2015.
Phase 1 is set to produce around 2.3 million tons of LNG per year and the project is expected to produce LNG for more than 20 years, enabling Mauritania and Senegal to become a global LNG hub, BP says.
The LNG project, together with the Sangomar oil development operated by Australia’s Woodside, is expected to drive economic growth in Senegal in the coming years.
Source: Oilprice.com
Russian Strike Damaged Ukrainian Gas Production Facilities- Naftogaz
Ukrainian natural gas production facilities were damaged in a Russian attack on Ukraine’s central Poltava region overnight, the state-run oil and gas firm Naftogaz and Energy Minister German Galushchenko said on Tuesday.
“Naftogaz Group’s production facilities in Poltava region were damaged. Fortunately, there were no casualties,” the company said in a statement.
Naftogaz “is taking all necessary measures to stabilise the gas supply situation in the Poltava region”, it added.
The Ukrainian air force said Russia had launched a combined attack, using 19 cruise, ballistic and guided missiles against gas production facilities in the Poltava region.
No missiles were reported shot down.
Poltava’s regional military administration said that nine settlements in the Myrhorod district had been left without gas.
Russia, which previously focused its missile and drone attacks on the Ukrainian electricity sector, has in recent months sharply stepped up its attacks on Ukrainian gas storage facilities and production fields.
Ukraine’s underground gas storage facilities are located in the west, while the main production capacity is in the east, in the frontline Kharkiv region, as well as in the Poltava region.
The state-run operator of the gas transmission system said Ukraine would likely increase natural gas imports to more than 16.7 million cubic metres (mcm) on Tuesday from 16.3 mcm on Monday.
Ukraine consumes 110-140 mcm of gas a day in winter and consumption is covered almost equally by gas production and reserves from storage facilities.
However, the former head of Ukrainian gas transmission system said that reserves in storage were close to critically low and this significantly reduced the ability to extract enough gas for daily consumption.
Both the drop in gas production and difficulties with extraction from emptied underground storage facilities may force Kyiv to increase the volume of imports.
The operator data suggested Ukraine would import 7.6 mcm of gas from Hungary, 7.3 mcm from Slovakia and 1.8 mcm from Poland.
Source: Reuters
Egypt, UK Strengthen Energy Relations During Recent Talks
Egyptian Minister for Petroleum and Mineral Resources Karim Badawi received the British Ambassador to Egypt Gareth Bayley and the accompanying delegation, at the Ministry of Petroleum and Mineral Resources’ headquarters in the government district in the New Administrative Capital.
The two sides discussed ways to enhance cooperation between the two countries in the fields of oil, gas, petrochemicals, renewable energy and mining.
During the meeting, Badawi highlighted that there is strategic cooperation between Egypt and Britain in all fields, especially in the fields of oil and gas through British companies that have a large business portfolio in Egypt.
He noted that Britain has modern technologies and expertise that can be used in the fields of research, exploration and production at offshore and onshore areas as well as brownfields in light of the incentive package launched by the ministry during the past period, in addition to the promising opportunities enjoyed by the Egyptian mining sector and the measures taken to create an attractive environment for investment in this vital sector, as well as energy efficiency projects.
Badawi invited the British Ambassador to attend the Egypt Energy Show Conference and Exhibition (EGYPES 2025), scheduled to be held during the period 17-19 February.
For his part, Bayley stated the importance of the fruitful cooperation between the two countries, which resulted in achieving many joint successes during the recent period in many fields, especially the oil and gas sector, noting that there are some British companies wishing to invest in Egypt in the fields of oil, gas, petrochemicals, sustainable aviation fuel, and mining.
At the end of the meeting, the British Ambassador invited the Minister to attend the International Energy Agency (IEA) Summit on the Future of Energy Security on April 24-25, 2025, hosted by the United Kingdom at Lancaster House in London.
Source: https://energynewsafrica.com
China Prepares For First International Green Bond Launch
China is preparing for the listing of its first overseas sovereign green bond, which will take place in London as the frontrunner in the energy transition race seeks to tap the international investor pool.
The size and timing of the listing are yet to be divulged but the Singapore portfolio manager told Bloomberg that it should be at least $3 billion. “It’s positive that China wants to give a new impetus to the green finance market,” a researcher from transition advocacy the Institute for Energy Economics and Financial Analysistold Bloomberg, which suggested in its report on the news that the listing would test investors’ appetite for investing in “the world’s top polluter.” China is the country with the most installed and operating wind and solar power generation capacity, the most EVs on the roads, and the biggest source of hydrocarbon-associated carbon dioxide emissions. Green bonds are seen as a key part of the transition—a tool for raising money for transition-related activities when subsidies are not enough. Last year, according to Bloomberg Intelligence, green bond issuance globally reached $708 billion, which was an 8% increase on 2023, with European companies and governments accounting for the biggest single portion of the total. China’s share in global green bond issuance has varied, with the 2022 total higher than both the 2021 national total and the country’s share for 2023 and 2024. Things could change this year and in the near future, with Asia as a whole turning into a significant new source of green bonds, according to Bloomberg. “China is the last savior of the green transition,” Natixis’ chief economist for Asia Pacific, Alicia Garcia Herrero, told the publication, adding that green debt could become “another layer of the argument, and there’s a lot of demand in Europe.” Source: Oilprice.comGhana: UENR, Lancaster University Seal Partnership To Boost Environmental Research And Education
The University of Energy and Natural Resources (UENR) in the Republic of Ghana has signed a Memorandum of Understanding (MoU) with Lancaster University in the UK.
The agreement, signed on February 6, 2025, aims to foster research collaboration, faculty and student exchanges, and enhance UENR’s global engagement in innovative environmental research and education.
This partnership builds on an existing collaboration between the two institutions, which has already yielded joint research initiatives, international workshops, and UENR’s inclusion in Lancaster University’s Africa Research Innovation and Partnership (ARIP) initiative.
The MoU reinforces both institutions’ commitment to advancing sustainable research and academic excellence.
By combining their expertise and resources, UENR and Lancaster University aim to make a significant impact in addressing environmental challenges and promoting sustainable development.
This partnership is expected to open up new opportunities for students, faculty, and researchers from both institutions, enabling them to collaborate on cutting-edge research projects, share knowledge, and develop innovative solutions to environmental challenges.
Source: https://energynewsafrica.com
Ghana: Jinapor, Ekperikpe Ekpo Hold Bilateral Talks On WAGP Project
Ghana’s Minister for Energy and Green Transition, John Abdulai Jinapor, has held a bilateral engagement with his counterpart, Rt. Hon. Ekperikpe Ekpo, Minister of State, Petroleum Resources (Gas) of the Federal Republic of Nigeria, in Accra, the capital of Ghana.
The two leaders discussed matters concerning the West African Gas Pipeline (WAGP) Project, particularly the advancement of the legislative amendment process.
The two were of the view that these amendments were essential to ensuring fiscal and regulatory harmony among all WAGP member states, which would enhance the operational efficiency and long-term sustainability of the project.
Given Ghana’s strategic role in this initiative, the meeting discussed how the two countries could collaborate to accelerate the legislative processes required for the successful implementation of the amendments and to strengthen Ghana and Nigeria’s partnership in advancing the objectives of the WAGP Project for the collective benefit of all member states.
The meeting was attended by other key stakeholders such as the Chairman, the Board of West African Pipeline Company (WAPCO), the Director-General of West African Gas Pipeline Authority, the Chief Executive of the Volta River Authority (VRA), the Chief Executive of the Ghana National Petroleum Cooperation (GNPC), the Chief Director and officials of the Ministry of Energy and Green Transition.
Source: https://energynewsafrica.com
Given Ghana’s strategic role in this initiative, the meeting discussed how the two countries could collaborate to accelerate the legislative processes required for the successful implementation of the amendments and to strengthen Ghana and Nigeria’s partnership in advancing the objectives of the WAGP Project for the collective benefit of all member states.
The meeting was attended by other key stakeholders such as the Chairman, the Board of West African Pipeline Company (WAPCO), the Director-General of West African Gas Pipeline Authority, the Chief Executive of the Volta River Authority (VRA), the Chief Executive of the Ghana National Petroleum Cooperation (GNPC), the Chief Director and officials of the Ministry of Energy and Green Transition.
Source: https://energynewsafrica.com Ghana: Dr Sulemana Takes Over Reins Of TOR As Acting MD
President John Dramani Mahama has appointed Dr. Yussif Sulemana as the new Acting Managing Director of Tema Oil Refinery (TOR).
He replaces Kofi Tagoe Mocumbi who served as the Managing Director during President Nana Addo Dankwa Akufo-Addo’s administration.
During Akufo-Addo’s administration, TOR had four Managing Directors, including one Acting Managing Director and an Interim Management Committee (ICM).
Despite several attempts, the refinery’s revamp remained unsuccessful during the eight-year administration.
As one of the energy sector agencies frequently in the news, TOR attracted significant attention from industry watchers.
Dr Sulemana, with his expertise, was often consulted by the Ghanaian media on TOR-related issues.
Contrary to January reports that Edmond Kombat had been appointed, Dr Yussif Sulemana has taken the reins as the new Acting Managing Director.
He officially assumed his post earlier today, Monday, with Kofi Tagoe Mocumbi present to hand over the baton.
Scores of refinery workers welcomed Dr Sulemana, and industry watchers are eager to observe his leadership.
Dr Sulemana brings over 15 years of experience in the energy industry, specialising in oil production, oil refinery process systems optimisation and systematic troubleshooting.
His credentials include a Bachelor of Science in Chemical Engineering, a Master of Science in Management (Oil & Gas), and a Doctor of Business Administration in Energy Management.
Some industry watchers who spoke to this portal stated that they would keep an eye on his leadership due to his past commentaries on the refinery’s operation.
Source: https://energynewsafrica.com
Gold For Oil Or Gold For Forex?
The geopolitical landscape in 2022 was drastically altered by the Russian-Ukraine war, drawing global attention to its ripple effects on economies and the oil industry.
The conflict triggered a surge in crude oil and refined products prices as global markets responded to supply chain disruptions amid the recovery in demand following the covid pandemic.
As international oil benchmarks soared, so did foreign exchange (FX) demand in the emerging markets, intensifying economic strain on import dependent economies such as Ghana.
The country, which lacks domestic refining capacity for crude oil, found itself vulnerable to these global shocks; with the country’s oil import bill ballooning from $240 million to $400 million per month and placing immense pressure on its already fragile FX reserves.
At the same time, Bulk Import, Distribution, and Export Companies (BIDECs) struggled with mounting debts and liquidity challenges, finding it increasingly difficult to source FX to pay international oil suppliers.
This liquidity crisis heightened Ghana’s risk exposure and triggering fear within some quarters in government that the country might run out of products as some of the major oil traders were reluctant to add to an already sky-high exposure with the BIDECs.
The Root Cause Ofthe Crisis Was Clear;Ghana Faced An FX Liquidity Problem.
This looming energy crisis served as the catalyst for the creation of the “Gold-for-Oil” (G4O) program. The government implemented the G4O policy to leverage the country’s gold reserves in securing petroleum imports, hoping to alleviate the pressure on foreign exchange reserves.
Conceptually, G4O presented a golden opportunity: if the gold proceeds had been used strictly to provide FX liquidity for oil importers, it could have served as a viable stop-gap measure to ensure payment to suppliers and keep oil flowing into the country uninterrupted.
However, the policy took a costly turn when the government, through the Bulk Energy Storage and Transportation (BEST) Company, ventured into the oil trading business—a domain where it lacked expertise.
Since its implementation in January 2023,G4O has covered only 30% of Ghana’s oil needs; a limited scope that raises doubts aboutits effectiveness in addressing key economic concerns such as fuel price stability, currency depreciation, and inflation in petroleum-dependent sectors
These limitations, coupled with BEST’s foray into oil trading, form the basis for assessing whether G4O has truly been a strategic solution or an avoidable misstep.
Governments nor policy makers are neither gold traders nor oil traders, and their direct involvement in commercial trading has historically proven problematic; evidenced by cases like TOR and BEST.
The challenges that emerged under G4O illustrate the risks of state-led interventions in a complex and volatile industry like oil trading.
As Ghana transitions to a new administration, caution must be exercised in determining the future of G4O and whether the nation will repeat past mistakes or adopt a more sustainable approach to securing its energy needs.
R E B U T T A L T O C L A I M S O N G O L D – F O R – O I L ( G 4 O ) S U C C E S S
Dr. Edwin Alfred Nii Obodai Provencal, former Managing Director of BEST, presents a defense of the program’s supposed benefits, including claims of fuel price stabilization, economic relief, and transparency.
Yet, even a rudimentary review by an elementary economics student swiftly exposes significant flaws in his arguments, calling into question, the supposed ingenuity of his claims. This rebuttal highlights the inconsistencies in his claims and the broader shortcomings of G4O.
The 70% Market Forces vs. 30% G4O Supply and its Alleged Impact on Fuel Prices and Inflation.
Fast forward to 2025, the recent increase in pump prices reinforces the theory that, the persistent correlation between rising crude oil prices, a weakening cedi and pump prices. This indicates the exchange rate fluctuations driven by international market forces remains the dominant factor; a challenge thattheG4O program failed to address.
Fuel Shortages and Laycan Challenges
We have on good authority information that some BIDECs were importing oil at much lower premiums and prices than those offered by BEST through the G4O program. This price disparity naturally led to BEST sitting on a lot of the stocks that they had imported via the G4O scheme, as prices further declined in Q3 2024 resulting in potentially significant losses for the initiative.. These losses in-turn meant that BEST struggled to remit the necessary proceeds from the oil sales to continue the imports.
As a result, the market saw lower utilization of the laycan that the NPA allocated to BEST in Q4 2024, and this ultimately led to low product imports into the country creating concerns about potential fuel shortages at the end of 2024.
Our findings also indicate that BEST was given priority in Laycan allocations for G4O supplies over BIDEC imports. Consequently, due to declining G4O import volumes, many of these Laycan allocations went unused. This inefficiency placed additional strain on BIDECs, who struggled to secure their own Laycan slots, leading to potential demurrage costs.
BEST’s Role: A Strategic Reserves Manager or a Trader?
BEST’s primary mandate is to maintain strategic fuel reserves and ensure national energy security. However, under G4O, BEST shifted its focus towards trading, raising concerns about its ability to fulfill this role effectively.
Credible reports indicate significant fuel losses of BIDECs, at BEST storage facilities in Kumasi and the northern regions, with no official explanation or corrective measures taken.
If BEST prioritizes profit-making through trading instead of securing reserves, it continues to undermine Ghana’s energy security. Calls for an independent audit of BEST’s financial performance under G4O, particularly its trading losses, remain unanswered.
Despite majority of Ghana’s fuel supply being controlled by BIDECs, transportation and storage inefficiencies at BEST facilities, particularly in Kumasi and northern Ghana; continue to disrupt the fuel supply chain.
Transparency and Accountability Concerns
Transparency is not merely about government involvement; it requires public disclosure of financial records, procurement contracts, and independent audits—none of which have been made readily available. There is no publicly accessible data on G4O transactions, profit margins, financial risks, or losses. Calls for an independent audit of BEST’s management of G4O have been ignored, raising concerns about accountability.
Broader Structural Issues Still Unresolved
Even if G4O may have contributed some benefits, it cannot be the silver bullet to address the fundamental issues affecting fuel supply in Ghana’s downstream petroleum sector, including:
- Edwin asserts that the G4O initiative was responsible for reducing fuel premiums from $135/MT to $65/MT, lowering diesel prices from GHS 23 per liter in November 2022 to GHS 15.45 currently, and contributing to inflation reduction from 54% to 23.5%. However, these claims are flawed.
- The oil market naturally selfadjusts after experiencing significant shocks. As demonstrated in Figure 1, following the Russian-Ukraine crisis, crude prices surged before eventually stabilizing as global markets gradually adjusted to the effect of losing Russians bbls to the European market which where the usual outlet
- As trade flows re-adjusted, with Russian bbls finding new homes in the east, latin America and West Africa – we saw the global market correct back to pre-war levels.
- Notably, the same trend occurred in the gas markets, with gas prices in Europe trading at all-time highs as Russia shut off gas supply valves to Europe in retaliation for the sanctions imposed on it.
- The Gold for Oil (G4O) program was launched in December 2022, received its first consignment in January 2023 – which represented only 10% of the nation’s monthly consumption, aimed to stabilize fuel prices by exchanging gold for petroleum.
- However, this program cannot be credited with reducing expump prices during that period. Data from Graphs 2 and 3 indicate that crude oil prices had already been declining, dropping from $96.04 per MT in the second pricing window of November 2022 to a new low of $74.27 per MT by June 2023.
- Similarly, international market prices reported by Platts for petrol and diesel fell from $968.25 and $1,096.98 per MT to $828.70 and $691.41 per MT, respectively.
- Consequently, ex-pump prices mirrored the downward trend in international markets. Petrol and diesel prices fell from GHS 16.57 and GHS 23 per litre, respectively, in the first pricing window of November 2022 to GHS 11.90 and GHS 11.96 in June 2023, as illustrated in Graph 4.
- This supports the view that the international market played a significant role in reducing prices well before the initial 10% G4O import reached the Ghana domestic market.
- Claiming that the G4O import is responsible for the decline in inflation from 54% in 2022 to 23.5% in 2025 (as illustrated in Figure 5), is fundamentally flawed.
- Given the marginal impact of the G4O on reducing ex-pump prices and its dwindling import volumes from its inception in 2023 through the end of 2024, it is difficult to attribute a 50% drop in inflation over two years solely to this initiative.
- Moreover, other significant factors, such as measures to control food inflation (a primary driver of overall inflation), were also at play during this period.
- Additionally, the program only covered about 30% of national fuel consumption, leaving the majority of imports subject to standard market conditions through Bulk Oil Distribution and Export Companies, confirms market forces beyond G4O played a much larger role in price fluctuations and inflation.
- The data clearly show that expump prices continued to mirror global price movements during the period, highlighting that the Gold for Oil program played a minimal role in reducing ex-pump prices and, by extension, inflation.
Fast forward to 2025, the recent increase in pump prices reinforces the theory that, the persistent correlation between rising crude oil prices, a weakening cedi and pump prices. This indicates the exchange rate fluctuations driven by international market forces remains the dominant factor; a challenge thattheG4O program failed to address.
Fuel Shortages and Laycan Challenges
We have on good authority information that some BIDECs were importing oil at much lower premiums and prices than those offered by BEST through the G4O program. This price disparity naturally led to BEST sitting on a lot of the stocks that they had imported via the G4O scheme, as prices further declined in Q3 2024 resulting in potentially significant losses for the initiative.. These losses in-turn meant that BEST struggled to remit the necessary proceeds from the oil sales to continue the imports.
As a result, the market saw lower utilization of the laycan that the NPA allocated to BEST in Q4 2024, and this ultimately led to low product imports into the country creating concerns about potential fuel shortages at the end of 2024.
Our findings also indicate that BEST was given priority in Laycan allocations for G4O supplies over BIDEC imports. Consequently, due to declining G4O import volumes, many of these Laycan allocations went unused. This inefficiency placed additional strain on BIDECs, who struggled to secure their own Laycan slots, leading to potential demurrage costs.
BEST’s Role: A Strategic Reserves Manager or a Trader?
BEST’s primary mandate is to maintain strategic fuel reserves and ensure national energy security. However, under G4O, BEST shifted its focus towards trading, raising concerns about its ability to fulfill this role effectively.
Credible reports indicate significant fuel losses of BIDECs, at BEST storage facilities in Kumasi and the northern regions, with no official explanation or corrective measures taken.
If BEST prioritizes profit-making through trading instead of securing reserves, it continues to undermine Ghana’s energy security. Calls for an independent audit of BEST’s financial performance under G4O, particularly its trading losses, remain unanswered.
Despite majority of Ghana’s fuel supply being controlled by BIDECs, transportation and storage inefficiencies at BEST facilities, particularly in Kumasi and northern Ghana; continue to disrupt the fuel supply chain.
Transparency and Accountability Concerns
Transparency is not merely about government involvement; it requires public disclosure of financial records, procurement contracts, and independent audits—none of which have been made readily available. There is no publicly accessible data on G4O transactions, profit margins, financial risks, or losses. Calls for an independent audit of BEST’s management of G4O have been ignored, raising concerns about accountability.
Broader Structural Issues Still Unresolved
Even if G4O may have contributed some benefits, it cannot be the silver bullet to address the fundamental issues affecting fuel supply in Ghana’s downstream petroleum sector, including:
- Lack of Refining Capacity: Ghana remains dependent on imported refined petroleum products due to the inefficiencies at the Tema Oil Refinery (TOR). G4O does not change this fact.
- Storage and Distribution Deficiencies: Ghana still lacks adequate strategic fuel reserves, making it vulnerable to global supply chain disruptions. The inefficiencies in BEST’s storage network further exacerbate this challenge.
- Regulatory Bottlenecks: Policies such as the Zonalization Policy and inefficiencies in the Integrated Customs Management System (ICUMS) continue to add costs to petroleum distribution.
- Strengthening Refining Capacity: Investing in domestic refining infrastructure will reduce reliance on imported refined petroleum, insulating Ghana from global supply chain disruptions and forex volatility.
- Enhancing Storage and Distribution: Realign BEST’s efficiency to focus in managing fuel reserves and eliminating logistical bottlenecks will ensure a stable and reliable fuel supply
- Implementing a Gold-for-Forex Strategy: Instead of direct commodity swaps, Ghana should leverage its gold reserves to stabilize foreign exchange markets, ensuring that oil importers have access to adequate FX liquidity.
- Ensuring Transparency and Accountability: Public disclosure of financial records, independent audits, and clear regulatory oversight will rebuild confidence in government-led initiatives and prevent mismanagement.