Gold for Oil: What BOST Delivered in 2023

In 2022 the cedi fell sharply against the US dollar and fuel prices at the pump became hard for many Ghanaians to afford. Much of the pressure came from the dollars needed to import refined petroleum. The Gold for Oil programme was the Bank of Ghana's response: pay for part of those imports with gold bought locally instead of scarce foreign exchange.

BOST, under Managing Director Edwin Provencal, was the state company that brought the cargoes in.

The first cargoes

The first consignment, about 40,000 tonnes, arrived at the start of 2023. In February, Edwin told Citi's Eyewitness News that four more gasoline cargoes, totalling 155,000 tonnes, would arrive before the end of the month. He said six bulk distribution companies had asked BOST for product and all six had been supplied, and he rejected claims that BOST favoured particular oil marketing companies.

Effect on import premiums

Speaking on Oman FM in May 2023, Edwin set out what had happened to the premiums importers pay per tonne:

• Before the programme, bulk distribution companies imported at a premium of about US$120 per tonne.
• BOST's first cargo, in February 2023, came in at US$70.
• A later BOST cargo came in at US$50, and some private importers then brought product in at around US$45.

His argument was that BOST's cargoes pushed the market to negotiate harder with suppliers.

Not everyone agreed with how the programme was run. The Chamber of Bulk Distribution Companies welcomed the policy but said it was tilted in BOST's favour and put pressure on private importers.

Winding down

In November 2023 the Bank of Ghana announced it would gradually phase the programme out. It described Gold for Oil as a crisis management policy and said that with the cedi appreciating and inflation easing, the conditions that justified it had passed.