Energy Ministry, NPA, BoG to avert imminent fuel shortage

The Chief Executive Officer of the Ghana Chamber of Bulk Oil Distributors (CBOD), Senyo Hosi, has said that stakeholders are working to avert any fuel shortage in the country.

He said this in response to a Bloomberg report that the country was faced with a looming fuel shortage.

Speaking in a radio interview, Mr Senyo Hosi explained that the government had anticipated the challenge earlier in March, and was working to avert any possible fuel shortage in the country.

“We are collectively, as an industry, the Bank of Ghana (BoG) and the Energy Ministry and the National Petroleum Authority (NPA) working to address and mitigate that future risk. The BoG, since March, has been taking a very proactive intervention for our market but that also is limited,” he said.

“It started with about 50 percent of our requirement, and now I think they have scaled down to about 20 and 25 percent of our requirement. We are working together with the central bank to come up with what we call Oil FX Market, so we can create a lot more predictability and certainty for the international suppliers,” he added.

No crisis

Although he acknowledged the challenges in the fuel market, Mr Senyo Hosi noted that the country was not yet in any crisis.

“There is the risk of a crisis, but we don’t have a crisis. That crisis will always exist, provided these factors are examined. We have stocks to last you a month and a few more to come, but that does not mean that there is enough comfort or certainty from the international market when they are seeing challenges with us making good our dollar payment,” he said.

The report

Bloomberg reported that the monthly fuel import bill for Ghana jumped to $450 million in May, from $250 million in January, according to two people with knowledge of the matter.

The report claimed that the central bank was only offering about $100 million a month at its foreign exchange auctions, and licensed bulk distributors can no longer plug the shortfall in the black market, the people said, asking not to be identified as the matter isn’t public.

BoG is reluctant to spend its limited dollars on importing fuel, though it’s also looking at ways to boost its foreign exchange holdings, the people familiar said. Those reserves stood at $8.34 billion at the end of April, down from $9.7 billion at the end of last year, according to the central bank.

The nation’s challenge has been increased as the cedi weakened 22 percent against the dollar this year, the worst performance among African currencies tracked by Bloomberg. The country’s inflation rate jumped to 27.6 percent in May, the highest level in more than 18 years, as food and transport costs surged.