The Ghana Oil Company Limited (GOIL) on Monday asserted that the Bank of Ghana holds the key for reduction in the prices of fuel which is on the upper trajectory.
Mr. Alex Josiah Adzew, GOIL Chief Operating Officer explained in an interview with the Ghana News Agency in Accra that; BoG must adopt pragmatic and prudent measures to secure the local currency against the foreign currencies especially the dollar.
The GOIL Chief Operating Officer therefore appealed to the Bank of Ghana to make dollars available to the BDCs directly instead of sometimes buying from the Forex bureau market.
He said 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 said 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.
Mr Adzew said 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.
The higher prices due to the dollar rate was also transferred to the consumer, “so 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,” Mr Adzew noted.
He added that 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”.
Mr 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”.