The National Petroleum Authority (NPA), has described as unfortunate calls by the LPG Marketing Companies Association of Ghana for the withdrawal of the 13.5 pesewas cylinder recovery margin.
The Authority has also condemned the assertion that the new charge will increase the price of LPG and other petroleum products at the pumps and thereby burden the consumer.
NPA in a statement issued on 4th April, 2020, stated that, “The attention of the National Petroleum Authority (NPA) has been drawn to a statement issued by the LPG Marketing Companies Association of Ghana (LPGMCs) on the above subject, dated April 3, 2020, calling for the withdrawal of GHp 13.5 Cylinder RECOVERY MARGIN which took effect on April 1, 2020,”
“Per our projection for this very pricing window (1st April to 15 April, 2020), consumers are expected to enjoy a price reduction of about 11.56 percent even with the introduction of the Cylinder Recovery Margin. These projections were made before the decision to introduce the Cylinder Recovery Margin,” the statement added.
The Authority further explained that the margin is to help the marketers to cover some of the cost as under the Cylinder Re-circulation Model (CRM), LPG cylinders will be procured, owned, branded and maintained by the Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs).
“We wish to state categorically that, contrary to their claim that the introduction of the margin will increase the product price at the pumps and thereby burden the consumer, the facts as they stand do not support that.”
“The margin is therefore to assist the marketers to offset some of their financial expenses, in accordance with the full cost recovery principle of petroleum products pricing in Ghana. It is therefore unfortunate for the LPGMCs to hold such a position”, it added.
However, the NPA says it will continue to engage with the marketers on apprehensions raised regarding tax components in LPG and other related issues of mutual concern.
“We are certainly aware of the difficult situation we all find ourselves in at this time, and the last thing we will do is to further burden the consumer with additional taxes. The NPA would, therefore, like to assure members of the general public of our commitment to ensure product availability, affordability, and accessibility, while ensuring the safety of the general public and the business viability of players across the value chain”, the statement concluded.
Background
The NPA on Wednesday, April 1, 2020, directed industry players to begin 13.5 pesewas charge on each kilogram of LPG.
It also instructed Oil Marketing Companies to increase the levy on Fuel Marking Margin from three pesewas to 4.5 pesewas per litre on every product.
But the Chamber of Petroleum Consumers, COPEC, has asked the NPA to issue an official publication notifying Ghanaians about a withdrawal of the levies placed on Liquefied Petroleum Gas, LPG.
Cylinder Re-circulation Model pilot implementation launched in Kade
The National Petroleum Authority, NPA, and the Ministry of Energy, started the pilot implementation of the Cylinder Re-circulation Model at Kade in the Kwaebibirim Municipality of the Eastern Region in March this year.
The Cylinder Re-circulation Model, which is primarily aimed at reducing LPG-related accidents according to government, will also create more jobs contrary to claims by players in the sector that they will lose their jobs.
