The Natural Resource Governance Institute (NRGI) is warning that Ghana risks making some significant losses if cabinet approves the hedging proposal from the Energy ministry.
The ministry wants to start quarterly hedging to avoid huge debts accumulating from subsidizing price differentials on petroleum products.
Despite earlier reports that the Energy ministry will start hedging on September 1 ,2014, Citi Business News has learnt the proposal is yet to be presented to cabinet for approval.
But the Africa Regional Co-coordinator of NRGI, formerly Revenue Watch, Emmanuel Kayole said,” it’s quite interesting that the ministry is thinking about it because you can actually win or lose by hedging”.
According to him the Ministry must be efficient in their calculations.
Speaking to Citi Business News on the sidelines of a program organized by the International Institute of ICT in journalism, Pen Plus Bytes to train journalists in the oil and gas industry , Emmanuel Kayole said , “I just hope that the technical group that is doing the forecasting will get it right”.
The move by the Energy ministry has received huge backlash from the minority in parliament and some think tanks , who have identified the continuous depreciation of the cedi as the main cause of the current volatility.
However the Communications Consultant to the Energy Ministry, Edward Bawa maintains the hedging proposal has been carefully prepared and takes account all the concerns raised by all stakeholders.
Early on Finance Minister Seth Tekper announced a committee comprising the Bank of Ghana (BoG) and National Petroleum Authority (NPA) to work on a hedging plan.