COPEC Asks for Reduction in Price of LPG Supplied by Ghana Gas

COPEC Asks for Reduction in Price of LPG Supplied by Ghana Gas

The Chamber of Petroleum Consumers, COPEC, has asked the Ministry of Energy to address some matters in the Liquefied Petroleum Gas, LPG, industry as supply by the Ghana National Gas Company, have contributed to the increase in the price of the product in some parts of the country.

According to COPEC, imported LPG is less expensive as compared to LPG supplied by Ghana Gas at its Atuabo Gas Processing Plant.

COPEC says regardless of the price differences, some Oil Marketing Companies, OMCs are being obliged under a policy of zonalisation to buy from Ghana Gas and sell to consumers.

In an interview, Executive Director of COPEC, Duncan Amoah, clarified that this issue has led to increases in prices of LPG from Ghana Gas supplied to some specific parts of the country.

“Our expectation was that Atuabo would rather drive down the price to encourage more people to switch to LPG. The difference often has been 40 pesewas to 30 pesewas simply because of a policy we called the zonalisation programme. What zonalisation means is that there are some specific regions or areas within the country which are supposed to load from Atuabo and nowhere or nobody else. And once you give exclusivity to the gas processor, you are allowing those selling the gas also to price anyhow without recourse to losing market shares. That is probably what is causing or bringing up this issue of abuse in pricing by Atuabo,” he said.

The price of Liquified Petroleum Gas has sparked some controversies in the industry in recent times.

Earlier this year, government announced the withdrawal of the 13.5 pesewas Cylinder Recirculation Margin, CRM, levy placed on every kilogram of Liquefied Petroleum Gas, LPG.

Why did government withdraw the levy?

This was done after the Chamber of Petroleum Consumers Ghana, and the Consumer Protection Agency, CPA, sued the regulator (National Petroleum Authority, NPA), over the introduction of the Cylinder Recirculation Margin, which according to them was introduced through illegal means.  The CRM allowed LPG operators to start charging 13.5 pesewas for each kilogram of LPG.

On Tuesday, March 31, 2020, the National Petroleum Authority, NPA, instructed Oil Marketing Companies, to begin charging 13.5 pesewas levy on every kilogram of LPG from the Wednesday, April 1, 2020.

In addition to the CRM levy, the NPA also increased the levy on Fuel Marking Margin from 3 pesewas to 4.5 pesewas per litre on every product.

About the Atuabo Gas Processing Plant

The Atuabo Gas Processing Plant is located on the coast of Western Ghana, and it is part of the Western Corridor Gas Infrastructure Project.

The US$1 billion power plant was commissioned in September 2015 and is presently generating about 150 million standard cubits of gas per day.

Since its inauguration, it has also been processing and supplying gas to the Volta River Authority, VRA to run its thermal plants to generate electricity.