Government urged to make US dollars available at fixed rate to oil importers

Prices of fuel have surged significantly in the second pricing window of March 2022

Bongo Member of Parliament, Edward Bawa has told the Government of Ghana and the Bank of Ghana (BoG) to find a way of making dollars available at a fixed rate to importers of oil products.

In his view, the cedi to dollar ratio is not helping the oil sector hence, the need to take the foreign exchange matters seriously.

Mr Bawa told TV3 in an interview that in order to control the rising level of fuel prices in the country, the government must take immediate steps to shore up the local currency.

“They must also find a way of making available to the oil importers, the dollars at a fixed rate for certainty and for planning. I say this because as we speak now, our total import bill, oil or downstream sector alone constitutes 20 per cent of our total import bill. So it is a huge chunk.

“The last time the Bank of Ghana auctioned dollars , it was over subscribed by about 200miilion. So, it tells you very clearly that on the strength of that, the government must begin to start looking at it seriously, how to make the foreign exchange available.

“That is the only way we can get that sorted. We must also make sure that we stabilize the cedi against the major trading currencies. The way the currency is going, it is embarrassing, it is a bit nauseating,” he said.

Mr Bawa had earlier, while speaking on the Key Points on TV3 on Saturday March 19, attributed the increase in fuel prices to the poor performance of the Cedi against the dollar.

“The major challenge now is the stability of the cedi,” he said.

The Chamber of Petroleum Consumers Ghana (COPEC) also noted that the cedi has seen a sharp depreciation against the dollar by 9.71% from GHS6.8360 to GHS7.500 to a dollar, a situation that affects the prices of fuel.

COPEC has said the ex-pump prices of LPG will also increase by 23% from GHS 9.8 per kg in this current window to GH¢12.04 per kg in the next window beginning March 16, 2022.

“This implies that a 14.5kg will be sold at Ghc174.58,” COPEC added.

“The petroleum price indicators as published by the NPA shows that the price of Gasoil (diesel) will increase by 30.41% from GH¢8.22 per liter in this current window to Gh¢10.721 per liter beginning 16th March 2022 and ex-pump prices of Gasoline (petrol) will increase by 18.25% from GH¢8.22 per liter to GH¢727 per liter within the same period.”

Meanwhile, the Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye has given the Ministry of Finance and the Bank of Ghana (BoG) a number of suggestions to enable them deal with the challenges facing the local currency, the Cedi.

Among the suggestions is the strict enforcement of foreign exchange currency laws in Ghana.

In a statement, he said among other things that “Enforce foreign exchange laws more strictly including relating to; documentation requirement for external transfers; limits on carry-on foreign currency by travelers; documentation requirements for foreign currency purchases from forex bureau; activities of unlicensed foreign currency dealers; Pricing of goods and services in cedis and not in foreign currencies, payment for services provided by Ghanaians in cedis and not foreign currencies, money laundering through banks and forex bureau.”

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