The Head of Corporate and Industry Operations at the Ghana Chamber of Bulk Oil Distributors, Daisy Attu Gyabaa, says the fast depreciation of the cedi amidst the rising cost of fuel on the international market is what is driving consumer prices in Ghana.

She explained that the rapid depreciation of the cedi has created a situation where money earned from selling fuel products in the country when converted into dollars are unable to make up for the cost of the product on the international market.

This, she said, has created a situation where BDCs are unable to pay their suppliers for their products.

“Basically what the BDCs who are members of my Chamber do is source for fuel from the international market, bring that fuel to Ghana for us to buy at the pump for us to be able to power our cars and industries and go to work and all that. But we buy our products in dollars and bring it to Ghana.

“Obviously we can’t sell in Ghana in cedis so we translate that FX into cedis and sell to OMCs. So OMCs buy from us in cedis sell to consumers in cedis, get their money back in cedis and pay BDCs back.  But BDCs went to the international market to buy the product in USD, so the cedis they’ve earned has to be translated into FX and sent back to pay the suppliers.

“So that’s where the problem is. We all know what has happened with the cedi depreciation, how high it’s been, how fast it’s depreciated, that is where the problem lies. We don’t have enough FX to be able to pay our suppliers,” she said on JoyNews’ PM Express.

Daisy Gyabaa said while the Bank of Ghana has been able to step in to provide the industry with some guaranteed $120 million monthly to support the industry, it pales in the face of the $400 million needed every month to meet the country’s demands.

Thus BDCs have to rely on commercial banks and other FX institutions that charge higher rates to be able to meet their monetary demands.

These accumulated factors, she said, is what has led to the sharp fuel increments at the pump in the past few months.

“That leaves us in excess of $280million dollars. So you need to go to your commercial bank, any other source you can get legally. So you go to commercial banks, other people who trade in FX, maybe you have deals with them to be able to get FX, to be able to pay your suppliers.

“But the problem here is BoG gives us a good rate, it is way lower than what the market or what the commercial banks will give us, but it’s only still meeting only 30% of what we actually need. So that concessionary rate that BoG gives is not able to translate into pricing.

“Because if I’m supposed to get a 100, I get 30 and imagine BoG gives me a rate of currently, let’s say 12, and I have to go to the market and get it at 15 or 16, when I put those two together I’ll still be hovering around 15 let’s say it really won’t make a dent in what I need to be able to price it lower for us to consume.”