LPG marketers tussle with NPA over US$400m investment

The LPG Marketing Companies Association of Ghana has cautioned the National Petroleum Authority (NPA) not to compromise the association’s investment of over US$400million in the industry.

Responding to a speech by NPA CEO Dr. Mustapha Hamid, at the recently held Ghana International Petroleum Conference in Accra, the LPG marketers have debunked some remarks made by the NPA boss – describing the comments as unfair and derogatory while calling for fair industry regulatory practices.

In a statement issued in Accra, the association said: “The assertion that we oppose the Cylinder Recirculation Model (CRM) is categorically false”.

The association’s Vice Chair, Gabriel Kumi, explained that while marketers acknowledge the necessity for change through the CRM, such wholesale transitions come with significant costs and the industry must be prepared to pay the cost of such changes.

Mr. Kumi said the LPG Marketing Companies Association together with the Retailers Association have invested over US$400million in the industry, with around 60 percent of this investment financed through bank loans.

“These substantial investments made by indigenous Ghanaians over the past 30 years cannot be sacrificed on the altar of change,” the statement said.

The association said in its bid to lend support to the CRM, it proposed mounting cages in all LPG stations nationwide to support the policy – an idea that was vehemently turned down by the NPA.

“It is rather unfortunate that we were being labelled as backward and not forward looking by the NPA at the recent conference,” the association indicated.

Employment opportunities by LPG marketers

The association asserts that while it is yet to obtain information on the number of jobs which the CRM will potentially create, the REFILL  sector currently provides employment to over 10,000 people comprising 8,000 direct and 2,000 indirect jobs.

Indeed, the association said it is not even abreast with the CRM’s current employment figures since its implementation started a year ago.

“There is no example of any country in the world with a well-established, regulated, robust and entrenched LPG distribution network that has been abandoned in favour of CRM without adequate due process and compensation to indigenous investors.”

According to the association, Colombia transitioned to CRM and provided full compensation to its citizens and indigenous businesses. Nigeria, on the other hand, is moving from CRM to refilling plants.

These are all lessons to be adopted in implementing a better system for Ghana, the statement noted, adding – “We the LPG marketers firmly reiterate our agreement with the NPA that both REFILL and CRM systems must co-exist and be implemented together”.

source: thebftonline.com