Former Managing Director of the Bulk Oil Storage and Transportation (BOST) Company, Dr. Edwin Provencal, has defended the Gold-for-Oil (G4O) policy, insisting that the initiative achieved its intended purpose and should not be scrapped outright.
His comments come in response to concerns raised by the Chamber of Oil Marketing Companies (COMAC) regarding the policy’s effectiveness, transparency, and long-term sustainability.
Speaking to Tutuwaa Danso on Starr Today, Dr. Provencal acknowledged that fluctuations in global oil prices sometimes led to instances where fuel imported under G4O was more expensive than that brought in by private importers. However, he argued that this was an inevitable aspect of the oil trade.
“At every point in time we brought in oil, we made sure that we brought in the product at a very good price for the people of Ghana,” he said. “But oil prices are volatile and change on a minute-by-minute basis. It’s possible that at the time of purchase, our price was the best, but global market shifts could later make it seem less competitive.”, he told Tutuwaa Danso .
Dr. Provencal further explained that assessing the success of the policy required a broader evaluation rather than focusing on individual transactions. He cited the case of December 2023, when oil prices plummeted globally, causing market-wide losses.
“Everybody who had brought in products made some losses because the prices fell globally. But that is how trading is done; you wait for the price to recover before you sell,” he emphasized.
In response to calls for G4O to be replaced with a Gold-for-Forex (G4F) model, where gold reserves would be used to stabilize FX markets instead of being directly exchanged for petroleum products, Dr. Provencal maintained that G4O had served its intended role as a temporary measure to tackle inflation driven by oil import costs.
“I think that the G4O initially was a temporary measure to address a particular problem in this country, which was supply-side inflation. It has played its role big time.”, he insisted
However, while defending the policy, Dr. Provencal acknowledged the need for a review and potential modifications.
“Should it be scrapped? I will tell you no. If you scrap it and your fundamentals are weak, you will still have pressure on your forex,” he cautioned.
“Should it be reviewed? Why not? Like any institution, we can look at the whole value chain and identify areas that can be enhanced.”, he admonished.
Dr. Provencal ultimately placed the future of G4O in the hands of the new administration, urging them to assess the policy’s gains and determine the best course of action.
“Ghanaians have voted for a particular government, and it is up to them to analyze the program and decide whether to enhance it for the good of the people. If it’s going to benefit Ghanaians, why not?, he concluded.
