Cash was never paid in ‘Gold for Oil’ exchange – NPP

The governing New Patriotic Party (NPP) says the first shipment of the oil purchased under the “Gold for Oil” initiative was not purchased with cash, as previously reported.

According to the party, intermediaries in the deal paid for the oil in cash, while Ghana paid them with gold.

Deputy Energy Minister Andrew Egyapa Meicer has come under fire after he revealed that Ghana purchased the oil with cash.

However, the NPP’s Director of Communications, Richard Ahiagbah, claims that no money was paid.

“When you hear that we paid money for the consignment, it is not that money moved from the vault of the Bank of Ghana for the payment but rather through the transaction, we offered gold through the broker to be able to get the forex for it.”

What did Mercer say?

Deputy Energy Minister, Andrew Egyapa Mercer, has confirmed that the initial consignment of 40,000 tons of oil brought into the country under the Gold-for-oil policy was purchased with cash instead of gold.

He said the companies they dealt with initially did not have the capacity to exchange gold for oil.

“The policy actually started with an intent to do strict barter for gold and petroleum products, but it became apparent that any of the international oil trading companies that do not have a commodity wing to deal with gold on their behalf will be excluded from the policy.

“We developed the policy such that we were operating two streams, one was direct barter and the second was monetising the gold, so we can pay for IOTs that were not other commodity focused but solely petroleum products…so the test run that we did was actually paid through the second route.”

Other issues 

The expectation was that the arrival of the 40,000 metric tons would reduce the pressure on forex and also present the country with cheaper fuel, but that has not been the case as fuel prices have increased twice within the period upsetting the majority of Ghanaians.

Government has disclosed that the policy will not immediately lead to a reduction in fuel prices until more consignment arrives in Ghana.

It has also said there is no need for government to put before Parliament, the gold for oil agreement for parliamentary scrutiny.

This follows several calls for government to provide contract details of the recent fuel consignment brought under the gold for oil policy.

Former President John Dramani Mahama has asked government to send the gold-for-oil agreement to Parliament for scrutiny and approval since the deal is an international financial transaction.