Editorial: Foreign exchange (FX) supply improvement sees stability with BDCs

Following significant improvements in foreign exchange (FX) supply and operational reforms, the country’s fuel import sector is witnessing signs of stability with Bulk Oil Distribution Companies (BDCs) reporting over US$1billion in FX inflows in the first half of 2025 alone.

In addition to the central bank’s bi-weekly FX auctions of US$20million, amounting to          US$120 million in the first quarter, BDCs have secured over US$800million through direct bank support.

This combined liquidity has helped absorb shocks from the currency’s rapid appreciation and geopolitical uncertainty.

Chief Executive Officer-Ghana Chamber of Bulk Oil Distributors (CBOD) Dr. Patrick Kwaku Ofori confirmed this when he said: “For six months we’ve had more than US$800million supplied through our banks, plus the biweekly auction amounts”.

The sector’s total monthly FX requirement stands at about US$400million – or US$4.8billion annually. While the Bank of Ghana’s (BoG) monthly auction covers only 10 percent of that demand, additional bilateral support has improved predictability and reduced pricing distortions at the pumps.

This forex injection comes amid broader macroeconomic support. The BoG’s foreign reserves rose to US$10.67billion in April 2025 from US$10.17billion in March, buoyed by higher gold exports and a crackdown on gold smuggling.

“We only hedged around 15 percent of our FX needs. With 50 percent met on spot and another 20-25 percent through short-term forward deals, our average cost was cushioned,” Dr. Ofori added.

“That clarity in the exchange rate for six straight weeks gave us confidence in pricing.”

The improved FX position has also helped dispel public suspicion that BDCs exploit exchange rate fluctuations to inflate pump prices. Also, operational disruptions that previously led to high demurrage costs and charges for delayed vessel unloading are being addressed.

CBOD estimates that from January to June the industry paid over US$44million in demurrage, translating to GH¢0.47 to GH¢0.60 per litre added to fuel prices at the pump. The recent forex support stems from closer coordination between the Bank of Ghana (BoG) and industry players.

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