20 June 2018, Sweetcrude, Accra — The Ghanaian government plans to buy crude oil at lower prices and then sell it when they rise, using the balance to subsidise imports of refined fuel.
Deputy Finance Minister Charles Adu Boahen, who disclosed this, told Bloomberg that the country, which became an oil producer in 2010, will buy contracts to protect it from higher oil-product prices in the third quarter as it seeks to curb volatility in what consumers pay at the pump amid rising costs of the fuel in international markets.
The government is putting together a risk-management programme to go to the market “in a month or two” for options on crude, with the strike price yet to be determined, Boahen said.
“Any time crude oil prices rise, the impact is felt six times more on the importation side than on the exportation side,” Boahen said. “After we hedge if crude prices go past the strike price you wouldn’t feel the effect at the pumps because it would have been capped.”
Bulk oil-distribution companies that import finished products and sell to oil-marketing companies supply most of Ghana’s fuel needs. The nation consumed 3.5 million metric tons of petroleum products in 2017, according to data from the National Petroleum Authority.