The Liquefied Petroleum Gas Marketing Companies Association of Ghana says the recent introduction of the 13.5 pesewas Cylinder Recirculation Margin (CRM) is unfortunate.
It says 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.
The National Petroleum Authority (NPA) introduced the levy, explaining that it will help government roll out the Cylinder Recirculation Model which will deliver Liquefied Petroleum Gas (LPG) to consumers in their homes.
Already, the Consumer Protection Agency and the Consumer Protection Agency have sued NPA over the decision.
According to them, the NPA directed Oil Marketing Companies to start charging 13.5 pesewas on every kilogram of LPG from the 1st of April 2020. In addition, the NPA has increased the levy on Fuel Marking Margin from 3 pesewas to 4.5 pesewas per litre on every product.
Speaking to Citi Business News, Vice Chairman of the LPG Marketing Companies Association of Ghana, Gabriel Kumi, said NPA has got the timing wrong, as the decision contradicts government’s efforts at this time.
“Let me take this opportunity to commend our President for some of the bold initiatives that he has taken to ensure that basic necessities like water and LPG are expected to come down. But unfortunately, LPG has not been brought down. In fact, last week an additional tax was added to the price of LPG. We were expecting our regulator to follow the footsteps of the President who appointed them to bring prizes of LPG down. At worse, just leave it as it is. This is not the time for us to look for money when the President is giving out freebies. We are here increasing prices of LPG. We feel that is so unfortunate. For the past two years the LPG Marketing Companies Association of Ghana has been at the forefront knocking at the doors of government to remove all existing taxes on LPG but they haven’t,” he said.
Cylinder Re-circulation Model
In October 2017, following a public outcry in the wake of the massive explosion at an LPG filling station at Atomic Junction in Accra, the government developed a new Liquefied Petroleum Gas (LPG) policy aimed at curbing explosions and ensuring stringent monitoring mechanisms, as well as creating more job opportunities in the LPG retail market.
The new policy directive for marketing and distribution of LPG in Ghana, using the Cylinder Re-circulation Model (CRM) is also to ensure that 50 per cent of Ghanaians have access to safe, clean and environmentally friendly LPG for increased domestic, commercial and industrial usage by 2030.
But since its conception, the stakeholders in the sector have raised various concerns. They have alleged that some giant multinational companies were behind the government’s decision to implement the Cylinder Re-circulation Model of Liquefied Petroleum Gas (LPG) distribution, and that the policy will cripple all local LPG businesses if the government goes ahead with the implementation, amongst others.
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.