Fuel Shortage Looms: Alex Mould Cites Forex Challenges For Imminent Problems At The Pumps

Fuel Shortage Looms: Alex Mould Cites Forex Challenges For Imminent Problems At The Pumps

  • Former GNPC CEO Alex Mould has pointed to the possibility of a fuel shortage in the coming weeks
  • According to the energy expert, a lack of dollars to enable BDCs to buy fuel on the international market is to blame for the imminent shortage
  • Meanwhile, the Bank of Ghana has disclosed plans to pump as many as $420 million dollars into circulation and possibly prevent the predicted shortage of fuel

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Energy expert Alex Mould has repeated his troubling prediction that Ghana will face an imminent fuel shortage due to a foreign exchange crunch in the coming weeks.

The former Chief Executive Officer of the Ghana National Petroleum Corporation (GNPC) posted on Facebook last month that Ghanaian banks were reporting a shortage of forex to meet payments of maturing Letters of Credit issued to international oil trading companies such as BP Vitol and Trafigura, among others.

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He said this was due to the Bank of Ghana’s inability to meet requirements at the various forex auctions.

Fuel pump
A hand inserts a fuel pump into the tank of a car. Source: Getty Images.
Source: Getty Images
“Some Banks have even stopped quoting FX rates as there is simply no availability for the quantities required by the fuel importers (BDCs). This is causing BDC‘s to max out their credit-line limits with their banks, and the implication is that the banks will no longer have credit lines available for the BDC’s to import fuel going forward,” he posted on Facebook.

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While Ghana’s forex challenges have been putting pressure on the cedi and driving fuel prices upward, this has not resulted in a fuel shortage.

However, on Saturday, September 17, 2022, he reiterated that fuel shortage was imminent in Ghana.

“From what I am hearing it’s coming home,” he posted on Facebook with a link to a story about his August prediction about a fuel shortage.

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Reacting to the report of the looming fuel shortage, Executive Director of the Chamber of Petroleum Consumers Ghana (COPEC-GH), Duncan Amoah, said he does not foresee such a situation.

He told YEN.com.gh exclusively that Ghana has at least three months of fuel cover.

"I can confirm without any equivocation that indeed we are no where near a shortage of fuel. At least in the next three to four months, Ghana has enough fuel available," he said..

In 2014, long queues formed at fuel filling stations in parts of Accra following reports that a fuel shortage was imminent.

While many filling stations had diesel, they had run out of petrol.

Bank of Ghana To sell $420m to BDCs In Last Quarter Of 2022

In a related development, reports indicate that the Bank of Ghana plans to sell $420 million to Bulk Oil Distribution Companies through banks between September and December.

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The greenback that would be sold at BoG’s Foreign Exchange Auctions exceeds what it sold in the third quarter.

BoG’s auction calendar has revealed that some $120 million each will be sold in October 2022, November 2022 and December 2022, respectively. In September, only $60 million has been put up for auction.

The forex auction is tipped to increase the supply of the dollar in circulation, thereby reducing the pressure on the cedi that is causing the local currency to depreciate.

The move, if carried out according to the BoG’s plan, will most likely cancel Mr Mould’s fear of an imminent fuel shortage.

Rising Fuel Price: Energy Expert Proposes Three Things Government Can Do To Solve The Situation

In a separate story, YEN.com.gh has reported that because fuel price in Ghana is strongly linked to the economy and general living conditions, recent hikes are driving up inflation.

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When fuel prices go up, food and everything else record a surge in price. This is why the constant bi-weekly fuel price increases remain a worry for many experts.

YEN.com.gh spoke exclusively to energy expert Duncan Amoah, on real solutions the government can adopt to stabilise fuel price.

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Source: YEN.com.gh

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