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General News of Friday, 10 June 2011

Source: ISD (Mabel Addo)

Government Initiate Steps to Hedge Petrol Prices

A nine-member National Risk Management Committee (NRMC) has been inaugurated in Accra, today, as part of government’s effort to hedge petrol price risk.

This follows cabinet’s approval of government’s initiative to hedge petrol price risk in 2010.

The committee had its chair and membership appointed by H.E. John Evans Atta-Mills and will report its activities to Cabinet through the Minister for Finance and Economic Planning.

The NRMC has been established under the National Petroleum Authority with representatives from the Ministry of Finance and Economic Planning, National Petroleum Authority, Bank of Ghana, Attorney-General’s Department, Ministry of Energy as well as experts from the private sector to implement the programme.

Addressing the media and other participants at the inauguration and swearing- in of the NRMC, the Minister for Finance and Economic Planning Dr. Kwabena Duffour, remarked that Ghana’s economy over the years has been heavily dependent on commodities both as a producer and consumer.

He said on the side of production, key commodities such as cocoa and gold have been the mainstay of Ghana’s economy for decades until quite recently, the production of crude oil was added to the list of commodity exports. He stated that the country’s consumption has been heavily dependent on the consumption of crude oil whose prices remain volatile.

The Minister disclosed that the major risk associated with Ghana’s economy is price risk which has been the source of instability in the country’s economy.

According to him, prices of cocoa beans in 2000 were at their lowest levels in three decades when prices plummeted to around $800 per metric ton. From a high of $641/ ounce, gold prices dropped to a low of $272/ ounce and during 1998-2000, the price of crude oil more than doubled from $11.91 per barrel to $27.39 per barrel.

To mitigate the price risk of crude oil, the NRMC has been tasked to design and establish the overall risk management policies for the government and ensure that adequate controls are in place.

Dr. Duffour expressed the conviction that the committee has the right mix of technical know-how and practical experience to oversee Ghana’s risk Management.

The chairman of the committee is Mr. Samuel Appah who is from the office of the President. Members include Alex Mould (CEO of National Petroleum Authority), Kwaku Awotwe (CEO Volta River Authority), and Nana Asafu Adjaye (CEO Ghana National Petroleum Corporation). Others are Nana Oduro Owusu( CEO, Cocoa Marketing Company), Steve Opata, (Bank of Ghana), Thomas Akabzaa (Chief Director, Ministry of Energy), Dorothy Afriyie Ansah (Attorney General’s Department) as well as Yvonne Quansah ( Ministry of Finance and Economic Planning. )