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07.04.2020 Oil and Gas

Introduction Of GHp13.5 LPG Bad Timing — Alex Mould

By Simon A. Tetteh
Introduction Of GHp13.5 LPG Bad Timing — Alex Mould
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Former Chief Executive Officer (CEO) of the National Petroleum Authority (NPA), Mr. Alex Mould, has described as ‘bad timing’ the introduction of the GHp 13.5 Cylinder Recovery Margin for Liquefied Petroleum Gas (NPA) by the NPA.

The NPA introduced a new levy of GHp13.5 per kilogram for LPG effective April 1, 2020 during the last Petroleum Pricing Window.

This, the former NPA bemoaned, saying “This is bad timing by the Authority; considering the current health crisis the last thing the consumer needs is to be burdened with this margin during such difficult and tumultuous times.”

In a statement, Mr. Alex Mould, further questioned why the rush to introduce the new levy, especially when its being piloted in two constituencies.

“Why the decision to immediately burden all consumers (even those outside of CRM pilot and operational regions), with the margin? Why should consumers outside the new system's pilot regions pay now? This distribution system is being given a trial run in the following pilot sites: Kade in the Eastern region and Obuasi in the Ashanti region, which currently accounts for less than 2% of total LPG usage.

"However, as the Cylinder Recovery Margin has been introduced nation-wide, this connotes 98% of consumers are paying for the benefit of the 2% i.e. those within the two pilot regions.”

Below is the full statement:

WHY MUST 98% of LPG CONSUMERS PAY NEW MARGIN TO BENEFIT ONLY 2% - ALEX MOULD TO GOVERNMENT

We understand the National Petroleum Authority (NPA) introduced a GHp 13.5 Cylinder Recovery Margin during the last Petroleum Pricing window.

This is bad timing by the Authority; considering the current health crisis the last thing the consumer needs is to be burdened with this margin during such difficult and tumultuous times.

As such, the NPA owes the general public a thorough and detailed explanation. We understand they've engaged stakeholders in 10 out of the 16 regions but I still can't fathom why the rush to introduce the new margin when there's not enough literature out there to educate and prepare the minds of LPG consumers.

For starters, why the decision to immediately burden all consumers (even those outside of CRM pilot and operational regions), with the margin? Why should consumers outside the new system's pilot regions pay now?

This distribution system is being given a trial run in the following pilot sites: Kade in the Eastern region and Obuasi in the Ashanti region, which currently account for less than 2% of total LPG usage.

However, as the Cylinder Recovery Margin has been introduced nation-wide, this connotes 98% of consumers are paying for the benefit of the 2% i.e. those within the two pilot regions.

Silently slipping the Cylinder Recovery Margin into the pricing model with no prior communication is not only unfair but comes across as deceitful.

Especially at a time when prices have fallen and the benefit should accrue to consumers!!!

Some other questions that the NPA needs to answer include the following:

- Is there a roadmap that can be shared with the public to understand the complete rollout plan?

- How will the margin be collected, and what accounting mechanisms are in place to ensure transparency and effective disbursement measures? i.e. Payment Accounts, Responsible parties for disbursement, etc.

- Is there a communication plan for the public to learn the guidelines regarding usage, phase-out, and replacement of current cylinders?

- Clarity on why consumers who have already invested in ownership of cylinder(s) are being unlawfully charged for new ones with no additional benefits?

- How will current cylinder owners refill their cylinders in this new recirculating model?

- Are cylinder owners now stuck with redundant cylinders that can not be filled? There should be some sort of cylinder exchange or replacement plan, with a buy-back or exchange mechanism; so existing cylinders will automatically be replaced, free of charge, in this recirculation exercise.

These are mind boggling questions that I've researched myself but surprisingly found little or no answers on the internet nor the NPA's website.

The LPG Marketers have called for a withdrawal of this new LPG margin. Yet, the NPA continuously insists that the new LPG margin did not result in LPG price hikes.

It's a disingenuous and inconsiderate Regulator who disregards the plight of consumers!!!

END

Signed

*Alex Mould*

*04/04/2020*

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