The Managing Director of the Standard Charted, Bank Ghana, Mr. J. Kweku Bedu-Addo, has called for bold, but pragmatic and well thought out economic decisions that will consciously protect the country’s fragile economy from external shocks. With specific reference to hedging in the oil market, Mr. Bedu-Addo said the decision to hedge was one of the most difficult, but inevitable under the present circumstance and stressed that it was important and a necessary decision to take to protect economic gains. "Our part of the world is highly volatile and Ghana is no exception particularly when it comes to the issue of crude oil prices and it is far this reason that we need to position ourselves in a manner that will place us far apart from the turbulence in the international markets," he said. The issue of hedging, until the latter part of last year, became a political issue in the country as varied comments were raised from different quarters. While one school of thought was of the view that the decision to hedge would be at a disadvantage to the economy, another’s were of the view that, it was the best decision for the country considering "the volatilities of oil prices on the international market. Crude oil prices rose from about US$65 per barrel in the beginning of 2010 and closed at about US¢92 by the close of the year. Considering the trend, analysts forecast that the prices would continue to rise and might probably hit the US$200 mark before the end of the year. Light, sweet crude for June delivery tacked on US$1.07 or one per cent, to settle at US$113.93 a barrel on the New York Mercantile Exchange after touching a low of US$112.25 in electronic trading overnight. The June contract finished at its highest settlement price since September 2008. In London, ICE Brent for June delivery settled at US$125.89, up 87 cents, or 0.7 percent, after trading from US$124.25 to US$126.10. It has gained in three of the last four sessions and the close was the highest since April 8, when prices settled at US$126.65. Overall, the size of the "geopolitical risk premium" in oil will be a "major variable price component for the foreseeable future," said Tim Evans, an oil analyst with Citigroup's Citi Futures Perspective, in a note to clients. Based on the surging price of the commodity, Mr. Bedu-Addo described the move by the government as an important decision. The decision of the government is said to have resulted in some windfall which has been used continuously to subsidies the product for consumers in the last six months. At a price of about US$ 125 per barrel, the government is confronted again with a decision to go for another hedge when the previous arrangement ends in July this year. According to the acting Chief Executive Officer (CEO) of the National Petroleum Authority (NPA), Mr. Alex Mould, the government must take a quick decision as to whether it was going to go for another hedging from August. With the expiry of the government's hedging arrangements in July, there is the suspicion that the prices of petroleum in the country would have to go up by about 3-5 per cent. According to Mr. Mould, the decision of the government to subsidies or not, the fact still remains that "subsidies are unsustainable and can hurt an economy deeper in the medium to long-term." "The earlier the decision is taken, the better it is for the country. As per the permutations of the authority, prices of petroleum should be up by 35 per cent to avoid under recoveries and build debts for the country which will in the long run be paid by the same people who enjoyed it," stated Mr. Mould, Source: Graphic Business