Controversial draft LP Gas policy shelved

Government has backdown on the controversial draft Liquefied Petroleum Gas (LPG) policy which seeks to among others, make the distribution of LPG to homes through pipelines.

It followed outcry by LPG marketing companies and tanker drivers in the country, who have expressed fears that such a policy would cause job losses that would lead to economic chaos.

The withdrawal of the policy has caused a planned protest by Association of Gas Tanker Drivers to be suspended following the Energy Ministry’s new decision.

The Association of Gas Tanker Drivers last week warned that they will embark on a nationwide strike if the National Petroleum Authority (NPA) fails to withdraw the Cylinder re-circulation model, an aspect of the draft national LPG policy expected to be rolled out in September this year.

Following the withdrawal of the LPG policy by government, the Gas Tanker Drivers Association last week told the media it has suspended its national strike for further talks.

But the Public Relations officer for the group, Bernard Owiredu Donkor, has said the strike would be re-launched, if the consultations do not lead to progress.

“I don’t think they will do a u-turn. Should they do that definitely will go back to our plans and probably even increase our actions in respect of what they’ve intended to do. We believe that the government has spoken and the government has decided to recall the entire policy based on our concerns. We welcome the move and we are hoping that just as the communication has put out there, we’ll be partakers in making this policy.”

The group vowed to resist the policy because it threatens the survival of their business if allowed to be implemented.

Implementation of the policy will mean gas filling stations will no longer be allowed to refill gas cylinders at their stations.

According to the National Petroleum Authority, the policy would also increase rural penetration of gas and help minimise the recent gas explosions at filling stations across the country. But the Tanker Drivers’ Union and the LPG Marketing Companies Association of Ghana has kicked against such a policy.

The latter wrote to the Ministry of Energy and Vice President, Dr. Mahamudu Bawumia to explain how it would not make economical sense to implement such a policy.

The Ministry of Energy on last week announced it has recalled the draft policy to allow for “further consultations with relevant stakeholders”, especially the LPG tanker drivers and the marketing companies.

A letter to the Ministry announcing the decision said the ministerial subcommittee, which was formed to review the policy, was faced with some challenges in the completion of its work.

Meanwhile, amidst the severe opposition and agitation to the new regulations of the National Petroleum Authority (NPA) introduced to help regulate the downstream gas distribution and sales by the commercial drivers of the gas tankers, the NPA has allayed the fears that they are likely to be rendered jobless if government goes ahead to implement the new regulation.

According to a statement issued by the Corporate Affairs Division of the NPA, “The NPA wishes to assure the general public that it is not in our interest to keep the Gas Tanker Drivers Association out of job as is being speculated”

In a response to the claim made by members of the association, NPA stated that it has no contractual agreement with Puma Energy Limited as claimed and therefore indicated that the company in question is not licensed for that purpose.

“Neither Puma Energy Limited nor any other Company has been issued a license to do cylinder re-circulation. Puma Energy is a licensed Oil Marketing Company whose primary role is to sell petroleum products to bulk consumers and the general public through retail stations and reselling outlets”

However, in a joint statement, the LPG Marketing Companies Association of Ghana, Ghana LPG operators Association (GLiPGOA), Ghana LPG Tanker Owners Association and Ghana LPG Table Drivers Union are challenged the decision by the NPA to disallow the refilling of cylinders at LPG outlets across the country.

But, according to the Ag. NPA CEO, Hassan Tampuli, instead of the LPG outlets, all gas cylinders will be filled by cylinder bottling plants for onward delivery to retail outlets.

The association, therefore has questioned whether the cylinder bottling plants are immune from explosion. The group said the NPA had so far failed to provide explanation regarding how the new dispensing plants would be free from explosion.

“Mr Tampuli, however, failed, or deliberately ignored to explain to the general public how his proposal will prevent gas explosion. Are these cylinder bottling plants explosion-free or explosion-proof? The answer is an obvious NO. One could just imagine the repercussions and consequences of an explosion at a single bottling plant,” the group said.

“Mr Tampuli was emphatic that the policy his outfit sought to implement was one aimed at preventing gas explosions. To achieve that aim, Cylinder Bottling Plants would phase out the current Dispensing Outlets.

“Mr Tampuli, however, failed, or deliberately ignored to explain to the general public how his proposal would prevent gas explosion. Are these cylinder bottling plants explosion-free or explosion-proof? The answer is an obvious NO. One could just imagine the repercussions and consequences of an explosion at a single bottling plant.

“Per his proposal, it could so happen that one bottling plant could serve about 3000 cylinders at a time. An explosion at such a place will be far devastating, compared to one at a dispensing outlet. We pray against such occurrence. One can only imagine the extent of gas shortage should such an explosion occur. Mr Tampuli, it will be in your own interest and the interests of all Ghanaians that you take a second -glance at your proposal, it will help,” the Group told the NPA CEO.

The Group continued stressing that, “The second issue and perspective is to examine the position of the current players in the gas dispensing sector should Mr Tampuli go ahead with the implementation of his policy.

“The use of LPG started around the late 1980s, and its consumption keep rising steadily over the years. The figures show that the overall consumption had risen from 5,267 tons in 1989 to 32,000 tons in 1996 and had been exceeding 200,000 tons since 2011. Dispensing Outlets and Trucks have been the main marketing and distribution outlets for the LPG.

“The operation of the Dispensing Outlets is an established business sector, giving employment to over 6000 Ghanaians. Currently, there are about 700 LPG Dispensing Outlets in operation across the nation. About 300 LPG trucks are employed in the sector, each truck having a market value of about GH¢400, 000.00. An estimated amount of GH¢ 700,000.00 is needed to establish a Dispensing Outlet. It is very clear that a lot of investments have been sunk into this sector by the operators, and the investment continues to grow and deepen.

“Construction of a single bottling plant cost over 1 million dollars, and it’s an obvious truth that none of the current players in the sector will be able to construct a single bottling plant. Foreign companies with huge financial base will directly or indirectly takeover the sector to the detriment of local players. Mr Tampuli, it’s your duty to ensure active participation of locals in the Petroleum Downstream Sector. You should be seen to be promoting local content.”

The Group further noted that, “it’s very obvious that Mr Tampuli’s policy will collapse the current dispensing outlets. It is also very clear that his policy has no place for the current dispensing outlets. The consequences will be dire: huge investments will be lost, over 6000 people will be jobless, and there will be no use for the LPG trucks and over 300 drivers. Banks will find it difficult recovering loans granted to these operators. Mr Tampuli, if you truly seek to minimise or prevent gas explosions, the bottling plants can’t be the solution, and resorting to it can only be described as ostensible. Eyes are watching.

“Regular education and checks at the dispensing outlets is one big solution to prevent or minimise explosions. Strict adherence to safety procedures and processes are also key. Engage the current players more, and interrogate their circumstances and operations. That will help in your quest to minimise or prevent explosions.”

Source: Adnan Adams Mohammed

 

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