Alex Mould: Government is being insensitive towards consumers

Government’s decision to introduce two new levies on petroleum products including Liquified Petroleum Gas (LPG) has been described as insensitive to citizens at a time when the world economy is at its worst times. “Government is being insensitive towards consumers”, Alex Mould, a former CEO of NPA and GNPC has said.

The NPA, in a circular issued on April 1, 2020, announced a new levy of GHp13.5 as Cylinder Investment Margin, to help the LPG marketing companies offset aspects of the cost involved in procuring and branding cylinders for the new energy policy (the Cylinder Recirculation Model) as well as an increase in Fuel Marking Margin from GHp3.0 to GHp4.5 per litre for fuel. But, the energy and finance expert, instead, wants the government to reduce fuel prices drastically to help cushion commercials drivers who are asked to reduce number of passengers amidst social distancing.

“I am hearing that the National Petroleum Authority has introduced new levies on the price build up on all fuel products including LPG. I think that bad & unfair to consumers”, Mr Mould reacted in awe during a radio discussion.

Meanwhile, a notice shared by Anny Osabutey of Corporate Affairs Department of the NPA indicates that, there are reduction in the price of petrol at the pumps, with Goil reducing their price to about 10 percent.

The notice explained that, “this means you get to save some money for other essential expenses at this critical time. The price of gas has also recorded a significant reduction.”

Apparently, energy experts had predicted over 20% reduction in the fuel prices at the pump. But, the new levies seems to be disadvantaging fuels users as they have to still pay more even when world oil price has reduced to all time lowest in 18 years record trading at US$20 per barrel as at Wednesday, April 1, 2020.

The former Executive Director of Stanchart Bank praised the government for doing a good job with measures to combat the COVID-19 pandemic shocks, but thinks the government was two weeks late in implementing the measures.

The newly introduced levy or Cylinder Recovery Margin by the National Petroleum Authority (NPA), is to support LPGMCs/OMCs ahead of the implementation of the cylinder Recirculation Model (CRM) not to burden consumers.

The NPA in March launched the pilot phase of the policy in Kade in the Eastern region and Obuasi in the Ashanti Region.

The policy is intended to change the current mode of gas distribution into a more secured and safe manner.

The policy is to ensure increase usage of LPG from the current 25% to 50% by 2030.

As part of the CRM policy, the LPGMCs and OMCs will be responsible for the branding, safety and maintenance of the cylinders.

Customers will no longer have to take an empty cylinder to be filled, they simply take their empty cylinder to an OMC/LPGMC and pick up a filled cylinder.

There will be different cylinder sizes from 3kg to 14.5kg to ensure that consumers pay for what they can afford.

Contrary to claims by some interest groups in the petroleum industry that the levy will burden the consumers, sources say the Cylinder Investment Margin of 13.5 pesewas is rather to support the marketers procure and maintain the cylinders.

A source at the NPA says the regulator is determined to support the LPGMCs and Oil Marketing Companies, and has consistently engaged and consulted them on all aspects of the implementation of the energy policy.

Source: Adnan Adams Mohammed