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04.04.2020 Oil and Gas

New LPG Levy Won’t Increase Gas Price – Says NPA

Alhassan TampuliAlhassan Tampuli
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The National Petroleum Authority (NPA) has said the introduction of the GHp 13.5 Cylinder Recovery Margin would not lead to any pump price increment of Liquified Petroleum Gas (LPG) in Ghana.

The LPG Marketing Companies Association of Ghana (LPGMCs) had issued a statement on April 3, 2020, calling for the withdrawal the GHp 13.5.

The margin took effect on April 1, 2020.

But a statement issued by its Corporate Affairs Department, the NPA stated categorically that, contrary to the claim of the marketing companies 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.

It says “ per our projection 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.”

“These projections were made before the decision to introduce the Cylinder Recovery Margin.

It is important to state that under the Cylinder Recirculation Model (CRM), LPG cylinders will be procured, owned, branded and maintained by the Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs),” it stated.

The LPGMCs and OMCs will assume full responsibility of the safety and maintenance of the cylinders, and also be liable for any accident involving their branded cylinders, it stated.

“The margin is therefore to assist the marketers offset some of their financial expenses, in accordance with the full cost recovery principle of petroleum products pricing in Ghana.”

“It is therefore unfortunate for the LPGMCs to hold such a position. That notwithstanding, the NPA will continue to engage them on this and other related issues of mutual concern,” according to the statement.

“We take note of the concerns raised in the statement regarding tax components in LPG and, we are happy to communicate a positive outcome in the fullness of time.”

It is the sole priority of the NPA that the public interest is served, it stated.

“It is also a responsibility of the NPA that the safety and security of the general public is not compromised,” it added.

---citinewsroom

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