Ghana national oil blames rising fuel prices on central bank’s forex policy
The Chief Operating Officer of Ghana Oil Company Limited (GOIL), Mr. Alex Josiah Adzew, has traced the skyrocketing pump price to the inability of the Bank of Ghana (BoG) to adopt pragmatic and prudent measures in securing the local currency against the foreign currencies especially the dollar.
This is as Nigerian major oil marketers are still feeling frustrated by the government in refunding them billions of naira being subsidy arrears owed them before the NNPC become the sole importer of refined products which they decry, has put them out of business.
GOIL chief stressed that due to the insecurity and the volatility of the local currency, the projections of most BDCs for the transaction period to absorb any changes may occur within the period.
He further advised the apex bank to make dollars available to the BDCs directly instead of sometimes buying from the Forex bureau market which sends dollars to upper trajectory.
Adzew argued in an interview with Ghana News Agency (GNA) that oil business transactions between the Bulk Distribution Companies (BDCs) and Multinational oil Trading Companies were normally conducted in dollar terms but unfortunately the BDCs transacted business with the Oil Marketing Companies (OMCs) in local currency based on forwarded exchange rate (Cedis).
He decried that the higher prices due to the dollar rate was also transferred to the consumer, saying “If the BoG can assure the BDCs of stability or create a transaction window for the period, it would help to reduce the fuel prices”.
“It is too risky to buy product in dollars and sale in Cedis after 60-day payment cycle.
“The international market prices were unpredictable coupled with the volatility of the local currency, “it is now becoming difficult for the prices of petroleum products to come down”.
Adzew also revealed that higher prices at the world market affected the operating margins of the OMCs, “we are not making any profit on the product….we are suffocating under the circumstances”.
“The OMCs had between 60 to 90-days credit line to pay for any product supplied by the BDCs so in order for the BDCs to secure their investment, they always pegged their price on a projected dollar to Cedi ratio due to the volatility of the local currency project,” GOIL chief averred.
