Government has announced the withdrawal of the 13.5 pesewas Cylinder Recirculation Margin (CRM) levy placed on every kilogram of Liquefied Petroleum Gas (LPG).
This was revealed by the Minister of Energy, Peter Amewu at a press briefing on Thursday, April 16, 2020.
“That slight increase in price that you saw in the papers, it has been withdrawn. The re-circulation module, I think as you are all aware was a very noble thing introduced by the government. That amount you saw was supposed to level up the prices. It has been withdrawn,” he said.
On Tuesday, March 31st, 2020, the National Petroleum Authority, NPA, directed Oil Marketing Companies, OMCs to start charging 13.5 pesewas on every kilogram of LPG from the 1st of April 2020. In addition, the NPA also increased the levy on Fuel Marking Margin from 3 pesewas to 4.5 pesewas per litre on every product.
Meanwhile, the Minister said government will later decide on the way forward in relation to the levy after a careful review by Cabinet.
Following the introduction of the levy, some industry players said that directive was unlawful and must be withdrawn with immediate effect
The Chamber of Petroleum Consumers, COPEC, demanded for an official publication from the National Petroleum Authority, NPA, notifying Ghanaians of a withdrawal of the levies it placed on Liquefied Petroleum Gas, LPG.
The Liquefied Petroleum Gas Marketing Companies Association of Ghana described the introduction of the 13.5 pesewas Cylinder Recirculation Margin (CRM) as unfortunate.
It said the levy is not only going to burden the tax payer, but is also insensitive to the plight of Ghanaians as the country grapples with the social and economic impact of the COVID-19 pandemic.
Also, the Chamber of Petroleum Consumers and the Consumer Protection Agency sued the National Petroleum Authority (NPA) over the introduction of the Cylinder Recirculation Recovery Margin.
The two companies in their writ of summons argued among other things that the NPA failed to consult with various stakeholders before introducing the policy.
But the NPA in an earlier release issued on Friday, April 4, 2020, maintained that such calls are unfortunate because its projection rather shows that for this very pricing window (1st April to 15 April, 2020), consumers are expected to enjoy a price reduction of about 11.56 percent even with the introduction of the Cylinder Recovery Margin.
“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,” they added.
Cylinder Re-circulation Model pilot implementation launched in Kade
The National Petroleum Authority, NPA, and the Ministry of Energy, started the pilot implementation of the Cylinder Re-circulation Model at Kade in the Kwaebibirim Municipality of the Eastern Region in March this year.
The Cylinder Re-circulation Model, which is primarily aimed at reducing LPG-related accidents according to government, will also create more jobs contrary to claims by players in the sector that they will lose their jobs.