To-Be LPG Policy Sparks Suspicions In Industry

The Liquefied Petroleum Gas Tankers of the Liquefied Petroleum Gas Marketing Companies (LPGMCs) has called on the Ministry of Energy to totally cancel the LPG draft policy and bring all stakeholders of the industry together to address all the concerns raised with the draft policy, and not to re-present it at a later time.

This call was made by Shakil Shafiu Mohammed, chairman of LPG Tanker Drivers Association, in an interview with The Republic in Tema, when he indicated that it would be suicidal to implement the details of the LPG draft policy, which requires that the present LPG filling stations remodel their businesses into LPG cylinder transportation and distribution.

The transport association, which enjoys a membership of over 15,000, an d feels threatened by the solidifying of the draft policy, is crying foul play, alleging that  the policy threatens to create a new business for a few new, while destroying the existing many others who have invested heavily in that industry.

The group was returning from a strike action from last Friday,  8th – 11thAugust,  which it demanded that the draft be completely abandoned,  with the Energy Minister responding with a call to them, assuring that his ministry would engage them without the National Petroleum Authority, to consider their views on the contentious draft LPG policy.

Shakil Mohammed said that the LPGMCs area legitimate group of 41 companies who are recognized by the National Petroleum Authority, and that averagely each of them has invested not less than GH¢700,000 into their individual ventures of transportation and filling of LPG bottles for industrial, commercial, educational and domestic users in the country.

The remodeling of their business portends creating uncertainties for them and also requires additional investments into their businesses, which will come at extra cost to them, he added.

The Energy Ministry, through the NPA, had earlier stated that it is in the process of formulating a policy document to streamline the LPG trade which, hitherto, has been regulated by safety measures and discretion of users.

Snippets from the policy under preparation indicate that the document intends to change the face of that industry by building about three large LPG filling stations at strategic positions in the country (Tema, Takoradi and Kumasi).

The information is that it is from those LPG filling points that the present filling stations would go for filling into small LPG bottles or tanks to their yards and, from those yards that a user would send their empty bottle and have it replaced with a filled bottle after paying the appropriate price tag.

A major flaw in the draft policy, the group intimates, is that, unlike the bulk gas vehicle, whose container is so thick and rarely explodes in the event of an accident, the domestic and commercial cylinders, packed onto a vehicle for transportation, will be shaking and lead to charging in the cylinder towards explosion.

He said that although they agree that carrying empty and filled LPG bottles on heads, taxis, motorcycles, or trotros is very unsafe, there could be a better way of solving the problem than the direction the policy seeks to take.

The association, a key player in the status quo, has demanded that all stakeholders – NADMO, Fire Service, Environmental Protection Agency, NPA, Standards Authority, tanker drivers, tanker owners, installers – be brought together by the ministry,  to set the objectives of a new policy and thereby draft its details accordingly for implementation.

Additionally, they opined that, if the draft policy comes to bear, users would strictly have to buy fully-filled cylinders and nothing less, while in present operations, the dispenser sells any amount a client requires.

So far, 70% of all users of LPG in the country are domestic users and about 30% are used by small vehicles, hence such a policy, if implemented, would increase the financial stress of users and encourage them to revert to charcoal and coal-pot.

He said that the association members have over 500 working filling stations littered all over the country, with many additional others at various stages of construction, and have been in business since the 1989 and have modelled their businesses along the distribution of LPG in the Ghanaian economy.

It is also their considered view that there is a particular Oil Marketing Company (OMC), which has been shortlisted to own the three plants, thus creating a monopoly in the industry, which a free market economy, as Ghana’s, does not accommodate.

The contention of the LPGMCs is that, since they have been in that industry longer and are more experienced with most required infrastructure already in place and functioning, they should be the ones through whom the policy should be implemented and not the creation of a selected new few.

It is, however, the contention of other energy experts outside the ministry that although there is no country in the world with such a large number of LPG filling stations as Ghana, three filling stations countrywide is largely inadequate and would even create distance inconvenience to transporters and, eventually, end users.

Information gleaned from the Energy Ministry is that there is a lot of jostling for the contract to build the three large filling facilities and that itself is creating friction in certain places of power.

A renowned energy expert, who wants to remain anonymous, has the view that the filling stations do not meet international safety standards and are not properly monitored by the right authorities during construction and also operating times.

He also posited that cylinder exchange and transportation to users’ doorsteps is far better for all parties concerned than sending empty cylinders to stations for refilling.

The many filling stations, some located close to residential buildings, are a threat to life and property and have, in certain cases, claimed lives accidentally.

Generally, fuel filling stations are supposed to be located at least 1 kilometer apart from each other, but this is in flagrant disregard by many a filling station.

The policy draft, which was begun by the previous government, was intended to deliver affordability, safety and sanity in the industry, but the abuse of the regime by taxis and other small vehicles, corrupted the system and discouraged its continued implementation.

The overall concept was to have an LPG bottle manufacturing company, such as the Ghana Cylinder Manufacturing Company (GCMC) to be operational at full capacity – and not be redundant, as it is now – to ensure that all gas bottles in the system, meet thorough safety standards and that end users would not be burdened with the costs of ensuring a safe bottle.

In an interview with a few users of LPG on their views of such a policy, they favoured for such a policy to deliver the fuel to their doorstep, but they disliked the part that they will have to exchange bottles with others which they perceive could be old and perhaps unsafe.

The other issue they showed concern about was the universality of pricing that, in a situation where one user lives in Tema and another in Wa, would they pay the same cost for the same kilograms of LPG?

In a rebuttal, the National Petroleum Authority, the eventual implementer of any such policy, refuted the speculations by the LPGMCs that the filling plants concept has been earmarked for one particular company.

The Republic has sighted a letter from the ministry recalling the policy.

The statement issued by the petroleum authority admitted that although they are in preparation of such a policy, the authority has not decided on whom to build or own the proposed LPG filling plants.



Source: Kofi Ampeah-Woode


The Republic News Online

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