Consumer hedge programme in the offing— Deputy Minister

Hon-Dagadu-webThe Ministry of Finance and the National Petroleum Authority (NPA), have received the approval from cabinet to carry out a consumer hedge programme to assist in stabilising ex-pump prices of petroleum products as well as mitigating the accumulation of price under-recoveries.

The Deputy Minister of Petroleum, Mr. Ben Dagadu who disclosed this at the annual general meeting   of the Ghana Chamber of Bulk Oil Distributors (BDC’s) in Accra on Friday said final discussions were ongoing on the commencement date of the hedging programme.

He said and BDC’s and other petroleum service providers would be advised accordingly.

He said a national committee had been tasked to establish the necessary legal and regulatory framework to craft an implementation plan towards achieving a full deregulation.

He further stated that the NPA would engage relevant industry stakeholders to ensure that the implementation had their buy-in.

“Thereafter the full deregulation policy document will be submitted to Cabinet for its approval before it is rolled out,” he said.

He said NPA had been directed by the Cabinet to institute several measures which would eventually pave the way for full deregulation of the downstream sector including price liberation.

The NPA has since July 14, 2014 been applying forward Rates in the Price Build Up (PBU) to mitigate BDC’s exposure to Forex Loss, additionally a Forex Loss Mitigation Account has been opened to accrue into account any positive differentials between the PBU rates for the pricing windows in which rates were made and Bank of Ghana (BoG) LC settle rates.

Mr. Senyo Hosi, Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors said this year must mark a turning point in the structure of the industry.

“The compounding challenges we face with liquidity and threat to our survival is only an indication that the industry cannot continue to operate on a business-as usual basis. We have sold when pricing as set by the NPA was not prudent. We sold, NPA prices showed under-recoveries which we unbudgeted for,” he said.

By BaabaCrentsil

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