Rising gasoline costs: You can’t be insensitive and ungrateful to BoG, says CBOD boss – MyJoyOnline

Rising Gasoline Costs: Balancing Gratitude and Economic Prudence

Understanding the Urgency of Fuel Price Volatility

The escalation of gasoline prices has become a critical concern for economies globally, with Ghana facing heightened pressure amid fluctuating global oil markets. On October 2, Dr. Patrick Ofori, Chief Executive of the Chamber of Bulk Oil Distributors (CBOD), underscored the indispensable role of the Bank of Ghana (BoG) in mitigating price shocks through strategic interventions. His remarks, featured on PleasureNews’ PM Business Edition, emphasize that dismissing these efforts risks undermining economic resilience. This analysis delves into the mechanisms, implications, and controversies surrounding Ghana’s approach to gasoline price stability.

Analysis: The Bank of Ghana’s Dual Role in Fuel Economics

Foreign Exchange Allocations: A Market-Stabilizing Tool

The Bank of Ghana has emerged as a pivotal actor in cushioning Ghana’s gasoline costs by providing targeted foreign exchange (Forex) support to importers. Dr. Ofori highlighted that between July and September 2025, the BoG allocated approximately $700 million to bolster fuel imports, with monthly figures peaking at $310 million. This intervention directly counters the inherent volatility of international oil prices, which averaged $1.05 per liter globally in 2025. By supplying Forex liquidity, the BoG prevents local dealers from overpricing refined petroleum products, ensuring affordability for households and industries alike.

Collaboration with the National Petroleum Authority (NPA)

Dr. Ofori highlighted the synergy between the BoG and the National Petroleum Authority (NPA), particularly under the leadership of Controller Dorothy Afriyie. Their joint strategy involves regulating import volumes and coordinating Forex releases to avoid market saturation or scarcity. Additionally, the National Petroleum Authority’s oversight of storage reforms, such as the decommissioning of outdated facilities, indirectly supports stability by reducing non-tariff barriers to supply. This partnership exemplifies a multi-agency approach to addressing fuel price challenges.

Summary: Key Insights from the CBOD Report

The gasolin cost crisis in Ghana reflects a fragile equilibrium between global market forces and domestic economic policies. Dr. Ofori’s analysis reveals three critical takeaways:
1. **Bank of Ghana’s Forex injections** are a calculated response to inflationary risks, not a discretionary expense.
2. **Collaboration with the NPA** ensures transparency and efficiency in supply-chain management.
3. **Political will** underlies effective contingency planning, as evidenced by the NPA’s proactive role in crisis management.

Key Points: Data-Driven Perspectives

• 📈 July-August 2025 Forex interventions by BoG: $490 million total.
• 📉 September 2025 BoG support surpassed $300 million, countering OPEC+ supply cuts.
• 🏦 CBOD’s advocacy highlights a consensus among bulk oil distributors about the BoG’s indispensable role.
• ⚖️ IMF’s 2025 forecast for Ghana’s inflation targets hinges on sustained gasoline price control.
• 🚨 Critics caution against over-dependence on Forex subsidies, risking fiscal deficits.

Practical Advice for Stakeholders

Consumer Strategies to Mitigate Fuel Cost Increases

individu<als can adopt these measures to offset rising fuel expenses:

• ☑️ Transition to fuel-efficient vehicles or public transportation.
• ☑️ Advocate for energy-saving practices in workplaces to reduce reliance on gasoline-powered operations.
• ☑️ Monitor government policies for emerging subsidies or tax exemptions on eco-friendly vehicles.

Businesses: Hedging Against Fuel Cost Volatility

Industries heavily impacted by fuel prices should:

• ☑️ Invest in predictive analytics to anticipate market trends.
• ☑️ Negotiate fixed-price contracts during favorable Forex window periods.
• ☑️ Explore renewable energy integration to reduce long-term dependency on fossil fuels.

Points of Caution: Risks and Unintended Consequences

Economic Sustainability of Forex-Driven Stabilization

Critics argue that continuous Forex allocations to subsidize gasoline imports strain Ghana’s foreign reserves, exacerbating debt vulnerabilities. The International Monetary Fund (IMF) has warned that persistent fiscal gaps could delay loan repayments, risking creditworthiness. A 2024 World Bank report noted that countries reliant on Forex subsidies for essentials often face delayed structural reforms, prolonging economic fragility. Dr. Ofori acknowledged this tension, urging policymakers to balance short-term relief with long-term fiscal discipline.

Inflationary Pressures Beyond Fuel: A Cautionary Tale

While gasoline prices capture public attention, broader inflationary trends demand attention. For instance, a 2023 African Development Bank study revealed that fuel subsidies in Sub-Saharan Africa indirectly inflated food prices by 12%, as transport costs cascaded into agribusiness overheads. Policymakers must ensure gasoline stabilization strategies don’t inadvertently worsen inflation elsewhere in the economy.

Comparative Analysis: Global Approaches to Fuel Price Management

Case Study: Nigeria’s Subsidy Windfall and Myanmar’s Border Fuel Trade

Nigeria’s $8 billion 2024 fuel subsidy program, while politically popular, contributed to a 3% budget deficit increase. Conversely, Myanmar’s informal fuel trade with Ghana highlights how regional interdependencies can dilute the effectiveness of centralized interventions. These examples illustrate the complexities of tailoring fuel price policies to diverse economic contexts.

Contrasts with Export-Driven Economies: Lessons for Ghana

Countries like Norway and the UAE mitigate fuel price volatility through sovereign wealth funds (SWFs), which invest export revenues in long-term stability reserves. Ghana, however, lacks a SWF framework, necessitating reliance on the BoG’s operational interventions. Adopting SWF principles could future-proof Ghana’s fuel sector against geopolitical shocks.

Legal Implications: The Regulatory Framework Behind Fuel Pricing

The Bank of Ghana operates under the Bank of Ghana Act, 2002 (Act 612), which mandates its role in maintaining price stability within the financial system. A 2019 constitutional review emphasized the BoG’s responsibility to collaborate with sector regulators, such as the NPA, to mitigate systemic risks. Recent amendments to the Revenue Mobilization Act (2024) now require cross-ministerial coordination to prevent redundant allocations during crises.

Conclusion: Toward a Resilient Fuel Economy

The interplay between the Bank of Ghana, NPA, and private sector stakeholders reveals a multifaceted approach to managing gasoline price volatility. While Dr. Ofori’s gratitude toward the BoG is warranted, sustained stability requires deeper structural reforms, including SWF adoption and private sector diversification. By integrating global best practices with localized expertise, Ghana can transform its fuel market into a model of economic resilience.

FAQ: Addressing Common Questions

What drove the Bank of Ghana’s significant Forex allocations to fuel importers?

Measures followed the 2024 OPEC+ production cuts, which reduced global supply and increased Ghana’s import dependency.

How does the National Petroleum Authority monitor fuel distribution to prevent price gouging?

The NPA employs GPS tracking for tankers and biweekly audits to ensure compliance with pricing guidelines.

Can Ghana eliminate gasoline price volatility without sacrificing economic growth?

Yes, through diversified energy sources (e.g., LNG imports), SWFs, and strategic Forex fiscal planning.

Sources and Further Reading

• Bank of Ghana Annual Report 2023
• IMF Staff Report on Ghana’s Fiscal Infrastructure (2024)
• MyJoyOnline Analysis of Petroleum Price Trends (October 2025)
• National Petroleum Authority’s Transportation Sector Review (August 2025)

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