The Chamber of Bulk Oil Distributors (CBOD) has denied reports that some Bulk Oil Distribution Companies (BDCs) have threatened not to renew their $300,000 licenses due to the implementation of the Gold for Oil policy.
The CEO of CBOD, Patrick Ofori, stated in a recent interview that no BDC has expressed such intentions and that the reports are unfounded.
According to Mr. Ofori, the BDCs are not opposed to the Gold for Oil policy and do not see it as a threat to their operations.
He explained that the key potential risks faced by BDCs relate to forex liquidity and availability, which impact fuel prices. Adding that, if the Gold for Oil program is successfully rolled out, it could address these challenges.
Mr. Ofori highlighted that while the current structure of the Gold for Oil program has not met expectations, CBOD and its members are engaging with the government to address the challenges.
He added that the Chamber would be satisfied with the current structure of the program if it could resolve the forex liquidity challenges faced by BDCs and also meet the fuel demand of BDCs in the country.
The Gold for Oil policy was introduced by the Bank of Ghana in November 2021 to address the forex liquidity challenges faced by the BDCs in the country. The program allows BDCs to access forex from the central bank by providing gold as collateral.
However, some BDCs have expressed reservations about the program, citing concerns over the modalities of the program and the amount of forex available.
The CBOD’s denial of the reports of license non-renewal by BDCs is reassuring and suggests that the Gold for Oil program could be a viable solution to the forex liquidity challenges faced by BDCs in the country.
However, the concerns expressed by BDCs regarding the program’s modalities and availability of forex need to be addressed to ensure the program’s success.
The government will need to continue to engage with BDCs to ensure that the program is rolled out effectively and meets the needs of all stakeholders in the oil distribution industry.