Whereas the LPG Marketing Companies Association of Ghana (LPGMCAG) hails the new LPG policy set by Government to address challenges in the LPG value chain and benchmark standard operating procedures to international standards it has explicitly expressed reservations about proposed new value chain by the main regulator, the National Petroleum Authority (NPA).
Framers of the policy insist its implementation would enhance delivery of LPG in a much safer way and also increase LPG penetration, nationally from the current 25% to 50% by 2030 has been regarded by the association as a benefiting one.
Readers will recall that on the evening of 7th October 2017, the nation was shaken by a horrible gas explosion at Atomic Junction in Accra, which led to the loss of seven lives, 132 injuries and the destruction of valuable property.
Following the disaster, Government directed that the Cylinder Recirculation Model of LPG distribution be implemented. This model means that LPG Bottling Plants will be sited away from congested commercial and population centers and will procure, brand, maintain and fill empty cylinders to be distributed to consumers and households through retail outlets.
But LPGMCAG said it does not believe that accidents as unfortunate as they are like the recent Atomic Junction explosion should lead to a complete switch to a new model which also has similar if not worse challenges.
The Policy seeks to scrap the current model of community based (10-30 MT capacity) mini – refilling stations to centrally located (1000 – 4000 MT capacity) cylinder bottling plants referred as the Cylinder Recirculating Module (CRM)
However, this new value chain according to LPGMCAG, would disrupt, the existing value chain per the NPAs implementation plan with the potential of rendering the existing infrastructure that is land and equipment at the refill stations worthless.
The association has therefore argued that the CRM practiced in Ghana some 30 years ago failed and gave way to the current model which propelled the existing penetration level, adding that any proposal which seeks to bring back a botched model should be piloted to address inherent challenges before a national rollout.
According to the association, this would avoid any rollback in the gains chalked so far, especially with the confession by the NPA boss the proposed model shall result in price increase to the consumer.
Admitting that Hydrocarbons by nature are dangerous chemicals in any form or shape and the best way to minimize accidents is to enforce safety protocols through standard operating procedures, the association holds that the failure of regulators like the NPA, EPA, FDI, GSA to regulate players should not be visited on the industry in such a manner that threatens investors.
It said that Ghana currently has a unique LPG infrastructure which could be easily adapted to meet the LPG policy goals indicating that it has shared how this could be done with the NPA at stakeholder engagements in a draft document.
The association further said “we are at a loss after the atomic Junction explosion, the NPAs current approach which is at variance with their recommendations to the Ministry of Energy on how to implement the CRM”.
Referencing the NPAs proposal, the association said that the existing LPGMCs refilling plants were largely owned by individuals rather than companies, adding that these individuals had made a lot of investments using bank facilities, therefore an attempt to phase them out without giving them ample period to recover on the investments will have serious repercussions on the individuals and banks as well.
Commenting on the policy, some members of the association said, they believed the smoke created from automobiles were more than that from firewood.
“We think the LPG access has been progressing from 1989 to 2011 (1989 to 1996) – 3819tons/year and (1996 to 2011) – 11200tons/year and this has been made possible by the Private sector. The consumption pattern is increasing but we do not have corresponding supply.
The private sector has really done well and has the propensity to increase but the main issue is the government to ensure that supply is adequate”, some members examined.
“We have not had a consistent supply for a month so it would be very difficult to know the current optimal consumption of LPG in Ghana”, it revealed.
It challenged government on what government it had done to ensure reliable supply of LPG as well as increase access to LPG to the projected 50% by 2020 especially in the rural areas, stating that LPGMCs have continually sought for land to expand but have been denied, as for the past two (2) years, licensing of retail outlets have constantly been shut off.
The association proposed that GCMC may also be added to the institutions to collaborate with NPA to undertake public education particularly in the safe use and handling of LPG cylinders, stoves and other related accessories.
“In the past, GCMC has carried out educational programs on safe use and handling of LPG through GTV Adult Education program, TV Breakfast shows, and occasional radio programs such as Asasawa. For instance, GCMC with collaboration with ATTC last year trained about 200”, it said.
The association further said that the LPGMCs should be allowed to form an industry player’s working group to come out with their strategic directions for achieving the policy objectives.
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