NPA dismisses LPG marketers’ arguments of overburdening consumers

The National Petroleum Authority has dismissed arguments by the Liquified Petroleum Gas Marketing Companies Association of Ghana that the introduction of the Cylinder Recovery Levy will increase the cost of LPG.

The Liquified Petroleum Gas Marketing Companies Association of Ghana, in a statement, called on the NPA to withdraw the new levy immediately, and further engage industry players on the best way forward.

But the NPA, in response, said: “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”.

“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 per cent even with the introduction of the Cylinder Recovery Margin. These projections were made before the decision to introduce the Cylinder Recovery Margin.

“It is important to state that under the Cylinder Recirculation Model (CRM), LPG cylinders will be procured, owned, branded and maintained by the Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs).

“The LPGMCs and OMCs will assume full responsibility of the safety and maintenance of the cylinders, and also be liable for any accident involving their branded cylinders. The margin is therefore to assist the marketers offset some of their financial expenses, in accordance with the full cost recovery principle of petroleum products pricing in Ghana”, said NPA.

Further, the NPA explained that it is unfortunate for the LPGMCs to hold such a position. That notwithstanding, it will continue to engage them on this and other related issues of mutual concern.

It, however, takes note of the concerns raised in the statement regarding tax components in LPG and, “we are happy to communicate a positive outcome in the fullness of time".

It pointed out that it is the sole priority of the NPA for public interest to be served, adding it is also a responsibility of the NPA that the safety and security of the general public is not compromised.

“We believe strongly that it is in the interest of the general public, Petroleum Service Providers, motorists and consumers of petroleum products that, we develop a model that will secure the safety of the general public, in order to forestall the past occurrences of gas explosions we have witnessed as a nation.

“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 it said, therefore, assures members of the general public of its 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.11075290