Gov’t considers hedging oil prices

The Finance Minister Seth Terkper has revealed that government has begun discussions over a new hedging policy.

In 2014, government announced its intentions to hedge but the move received stiff opposition from energy analysts and some opposition elements.

Per the hedging program, crude oil prices will be fixed at a particular figure over a period of time to contain any price hikes on the international market, which will then cushion Ghana.

Currently, crude oil on the international market has slumped below 50 dollars per barrel, the weakest since 2009.

Speaking to Citi Business News, the Minister of Finance Seth Terkper said the hedging price would be made public after the review process is completed.

“We were doing what we call plain vanilla hedging, which involving hedging the price…we are in the process of reviewing “, he stated. 

Mr. Terkper said government expects to learn lessons from the evaluation of the Hedging program introduced since 2010.

Meanwhile the Chamber of Bulk Oil Distribution Companies (BDCs) has described as prudent; government’s plan to reintroduce the hedging of petroleum pricing.

This comes after the chamber resisted moves by government to introduce the policy last year.

Speaking to Citi Business News, the Chief Executive Officer of the Chamber, Senyo Hosi said considering the current plummeting price of crude on the international market, the policy can help government generate some revenue.

“Under the current market circumstances it is prudent for us to hedge the prices after a few more weeks depending on the trends that we see”, Mr. Horsi stressed.