NPA disquiet over rising cost of LPG, assures to bring prices down

The National Petroleum Authority (NPA) is disquieted over the rising cost of liquefied petroleum gas (LPG) and its concomitant impact on discouraging the use of fuel wood, particularly in rural areas.

There has been a significant price increment for LPG over the past few years. Prices have surged from 5.81 cedis per kilogram in January 2020 (84 cedis for a 14.5-kilogram cylinder) to as high as 240 cedis presently.

The LPG Marketers Association has pointed out that, apart from the slight uptick in world crude prices and an $80 per metric ton tax imposed to support the government’s cylinder re-circulation model and the failure by the NPA to reduce the premium for bulk distribution companies by $70, these were key factors driving the price hike.

The situation has raised concerns among consumers and experts, especially since LPG, previously subsidized to promote affordability, now bears multiple taxes and levies following the removal of all subsidies.

Grace Zateh, a food vendor in Koforidua, says the high cost of LPG and other factors discourage her from using LPG.

She told Ksapa News, “The price of LPG is very high, so compared to charcoal, it is economically good for me to use charcoal. Also, some foods like Banku, Kokonte, and Jollof taste better when prepared on a coal pot, so the customer likes it like that, but if the prices of LPG come down with this program [Cylinder Recirculation Model (CRM)], we will gradually switch to LPG,” said Zateh.

Addressing these concerns at the launch of the Consumer Week celebration organized by NPA in Koforidua on Thursday under the theme “CRM: Making LPG Accessible to All in a Safe and Efficient Manner,” the Chief Executive Officer of NPA, Mustapha Abdul-Hamid, expressed worry over the soaring price of LPG.

He assured that the NPA is working to lower LPG prices to make it more accessible to the average Ghanaian family, aiming for 50% of Ghanaian households to use LPG as a major cooking method by 2030.

“NPA takes a serious view of the rising prices of LPG in the country because, frankly, to the extent that LPG remains expensive or costly, we will not be able to persuade the vast majority of Ghanaians, especially those in rural areas, to stop or avoid the use of fuel wood. Because the trees they see are available to them in their environment, the easier option is for them to cut trees in order to make fuel for cooking.”

He continued, “But if we can assure and ensure that LPG prices are within the reach of every Ghanaian family, then we can persuade people to stop using wood for fuel. To that extent, I want to assure you that the NPA is working tirelessly to ensure that we bring down the prices of LPG and make it available for the majority of the Ghanaian people.”

Speaking on the Cylinder Recirculation Model (CRM), Mustapha Hamid stated that in order to speed up this model of LPG distribution, NPA has supervised and facilitated four bottling plants and granted licenses for setting up several cylinder exchange points and other relevant infrastructure for the distribution of LPG under the CRM.

He views this model as a game-changer in job creation.

“With the CRM model, even a fresh graduate from the university who is desirous of doing business and whose father has a small plot of land can establish a distribution point. For people who have some money, you can establish a cylinder depot where the bottling plants can pipe all the cylinders at your depot, and then you can do the distribution,” stated the CEO of NPA.

Mustapha Hamid emphasized, “This cylinder recirculation model really will be a very huge resource or avenue for engaging the varying numbers of unemployed youth that we have in our country. It is for this and many other reasons that I call on Ghanaians to embrace the Cylinder Recirculation Model, which is a game-changer for all of us in the country.”

Deputy Energy Minister Collins Adomako-Mensah reiterated the government’s commitment to expanding the use of clean energy, noting investments and the distribution of 28,000 LPG stoves and accessories across 13 districts.

Eastern Regional Minister Seth Kwame Acheampong called for continued investment to increase access and awareness of LPG usage.

He acknowledged flexibility in the CRM to ensure access for all.

“It is refreshing to note that those of us who do not have a cylinder do not have to necessarily buy one before we can use LPG. All we have to do is visit a Cylinder Exchange Point in our community and register to gain access to a filled cylinder at a reasonable price. The cylinder exchange points, thus, allow the authorities to bring LPG closer to the people without having to spend so much on constructing LPG refilling stations,” said Seth Kwame Acheampong.