Edwin Provencal, the Managing Director of the government-owned Bulk Oil Storage and Transportation Company, has acknowledged that some private Bulk Distribution Companies (BDCs) have been importing petroleum products at prices less expensive than imports made possible by the government’s gold for oil program.
Using the BOST, the state is acquiring petroleum products and paying with gold rather than foreign currency as part of the government’s “oil for gold” effort.
It was introduced in response to the recent Cedi devaluation against major international trading currencies and the government’s inability to raise loans on the international markets, which caused a severe decline in the nation’s foreign exchange reserves.
However, the BDCs’ representative body, the Chamber of Bulk Oil Distributors (CBOD), has noted that the gold for oil program may have had an unintended consequence, as the BDCs are not receiving the foreign exchange they require from the central bank to import petroleum products at competitive prices.
Dr Patrick Kwaku Ofori, the Chief Executive of CBOD, has frequently stated that if chamber members were given nearly the same preferential treatment as BOST under the gold for oil scheme, they could contribute to energy security and a decrease in gas prices.
Mr Provencal confirmed and conceded that BDCs are landing products at cheaper rates and at more competitive pricing than BOST is able to, even though government guarantees BOST’s forex allocation and underwrites its trading risks.
“In the last three weeks or so, we [BOST] brought in products at about 50 [USD per barrel] but some BDCs brought in products at almost 45 [USD per barrel],” He said.
