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Wednesday, December 7, 2022

Bawumia supports the use of gold to buy petroleum products

Dr. Bawumia

Vice President Mahamudu Bawumia has given his full support to a proposed policy framework for the use of gold to purchase petroleum products in Ghana.

The new policy framework is expected to be operational by the end of the first quarter of 2023.

He said that the exchange of gold for oil represented a great structural change in the economy.

In a post on his Facebook wall on Thursday, Dr. Bawumia wrote: “Oil importers’ demand for foreign currency in the face of declining foreign reserves results in depreciation of the cedi and increases in the cost of living with higher prices for fuel. , transportation, public services, etc.”

“To address this challenge, the Government is negotiating a new political regime in which our gold (instead of our US dollar reserves) will be used to buy oil products.”

“The exchange of sustainably extracted gold for oil is one of the most important economic policy changes in Ghana since independence. If we implement it as planned, it will fundamentally change our balance of payments and significantly reduce the persistent depreciation of our currency with associated increases in fuel, electricity, water, transportation and food prices. ”

“This is due to the fact that the exchange rate (spot or forward) will no longer enter directly into the formula for determining the prices of fuels or public services, since all national fuel sellers will no longer need foreign currency to import petroleum products.

He congratulated the Ministers of Lands and Natural Resources; Energy; and Finance, Precious Minerals Marketing Company and the Governor of the Bank of Ghana for their supportive work on the new policy.

“We expect this new framework to be fully operational by the end of the first quarter of 2023,” he added.

The cedi has experienced a depreciation of more than 54 percent in the last 10 months, which has negatively affected the importation of petroleum products and other consumer items such as rice, cooking oil, and tomato paste.

Source: GNA

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