Ghana: LPG Marketers Unhappy GHS60 Million Investments Going Waste

A Cabinet decision by the Akufo-Addo-administration in the Republic of Ghana about four years ago is crippling a private investment of GHS60 million sank into Liquified Petroleum Gas retail outlets across the West African nation.

The huge investments, which were at various completion stages in 2017, hit a snag when Cabinet placed a ban on all LPG points.

That did not spare those due for commissioning particularly after a gas explosion at Atomic Junction, a suburb of Accra, the capital city, which claimed about seven lives with scores of people suffering gruesome injuries.
The Cabinet decision was to allow for proper safety, health and environmental assessment of all LPG outlets across the country.

However, four years on, the government is yet to lift the ban, thereby, leaving the outlets at risk of going waste.

Recently, energynewsafrica.com reported that Ghana’s Energy Minister, Dr. Matthew Opoku Prempeh met the leadership of the LPG Marketers Association, who were lamenting over the introduction of 18 pesewas increment on LPG product, which in their view, was going to worsen the condition of consumers and also result in decline consumption.

At the end of that engagement, the Minister, who had then assumed the office as a newcomer and so not abreast with their issues, requested the leadership to put all their grievances on paper and forwarded it for action to be taken.

In view of that, the Association submitted its documented grievances to the Minister last month.

In the petition which was intercepted by energynewsafrica.com, the LPG Marketers Association noted that if the ban was not lifted immediately, the GHS60 million investments would go waste, adding that they were already under pressure to repay loans contracted to build the retail outlets.

“These outlets had gone through all the necessary rigorous regulatory processes, appraisals and received the necessary green light before commencement of acquisitions, construction and investment. In all, our members made about GH¢60 million worth of investments into the acquisition of these outlets,” a portion of their petition read.

Out of the 100, the petition said 14 of the outlets had been completed and were awaiting pre-commissioning permits from the National Petroleum Authority (NPA); 21 had received fire permits, Environmental Protection Agency (EPA) permits, Metropolitan Municipal and District Assembly Development (MMDA) permits, as well as NPA construction permits; and the rest had received ‘no objection’ letters and were at different regulatory permitting stages.

“Much as our Association is not against such government’s directives, it would be sad to allow our meagre and hard-earned resources to go to waste, especially when these investments were made not contrary to the law and regulations but in accordance with existing laws and regulations at the time,” it said, adding that together with regulators, the industry had since experienced a sustained period of safety.

The Association noted that following a petition and engagement with the government through the NPA, the embargo was partially lifted at the end of 2020 but the NPA was supposed to process the list of stations under construction before the Atomic Junction accident, and issue permits to enable them to operate. The association, however, noted that this has not been done.

“The above notwithstanding and considering the total investment that had already gone into the development of the stations under construction, coupled with the fact that various permits were legally obtained, the LPGMCs are urgently appealing to the government for permission to be allowed to complete all the stations under construction within a specified period and operate them.”

The Association further urged that as the new LPG policy i.e. the Cylinder Recirculation Model (CRM), has not yet started, so the government should allow them to complete all projects pending before the Atomic Junction accident.

“It would only be fair to allow our members to complete and operate all the outlets under construction because these same outlets will, in future, become cylinder exchange points when the CRM is eventually rolled out. Thus, this nation will avoid drowning local investments while providing employment to the youth, making significant contribution to the economy through taxes, and increasing the penetration of LPG among the population as well as reducing the dependency on wood fuels to save our forests,” another portion of the petition read.

“We believe that the issues raised above, when considered carefully and acted upon, will address our concerns and thereby lead to a vibrant LPG downstream industry in Ghana to benefit all stakeholders, especially government,” the petition said.

The Association also raised concerns about the introduction of 18 pesewas tax on LPG and urged the Minister to intervene to get it abolished.

Source: www.energynewsafrica.com