Oil Prices Protect Ghana from rising oil prices by hedging oil revenue – Senyo Hosi

According to Senyo Hosi, since Ghana is a net exporter of oil, it is necessary to hedge oil revenue to help cushion consumers greatly.

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Senyo Hosi

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The Chief Executive Officer (CEO) of the Chamber of Bulk Oil Distributors (CBOD) has called on the government to initiate a process that will stabilize oil revenue in the country following the gradual rise in crude oil prices.

According to Senyo Hosi, since Ghana is a net exporter of oil, it is necessary to hedge oil revenue to help cushion consumers greatly.

“So we can hedge against cash settlement where the government rakes in a hedge income…the government will, therefore, reduce the taxes to correspond to the losses in income from crude oil exports,” he told Accra-based Citi FM.

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The prices of crude oil have been increasing gradually on the international market for some weeks now.

A barrel of the commodity is being sold at seventy-seven dollars.

This is expected to increase the cost to importing countries like Ghana.

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“In addition, the government could implement the crude price threshold which is the politically sensitive price that the government thinks it has. Assuming the CPT is pegged at 75 dollars a barrel, the government reduces the taxes to compensate the loss of tax revenue when the price goes above 75 dollars mark,” Mr. Hosi added.

In a related development, others have suggested that the government resorts to the stabilization fund to cater for the losses in revenue with the implementation of the hedging policies being offered.

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