Ghana’s petroleum downstream regulator, the National Petroleum Authority (NPA), has proposed the establishment of three regulatory funds under a new draft Bill currently before Parliament for consideration and approval.
The proposed funds are the Distribution Fund, Infrastructure Fund and LPG Promotion Fund.
The provisions are set out in Clauses 25 to 40 for the Distribution Fund, Clauses 42 to 58 for the Infrastructure Fund, and Clauses 59 to 75 for the LPG Promotion Fund.
Distribution Fund
Under the Bill, the Distribution Fund would seek to ensure the regular and efficient transportation of petroleum products from refineries or bulk supply points to storage depots, retail outlets and other delivery points across the country.
It would also seek to ensure uniform pricing of petroleum products nationwide, regular supplies to all parts of the country, security of the petroleum products distribution system and an efficient distribution system.
The proposed sources of funding include the primary distribution margin in the prescribed petroleum pricing formula, the unified petroleum price margin and the security margin for providing security for the petroleum distribution system.
The fund would be managed by a Distribution Fund Management Committee, with the sector minister nominating a member of the NPA board as chairperson.
Other members would include the chief executive officer of the NPA, and representatives of BOST Energies, the Tanker Owners Union and the Chamber of Bulk Oil Distribution Companies (CBOD), as well as two other persons with managerial experience in the sector nominated by the minister.
Infrastructure Fund
The Infrastructure Fund would finance the construction, development and maintenance of a sustainable petroleum products distribution system, as well as infrastructure for the storage, refining and transportation of petroleum products.
The fund would also support the provision of strategic fuel reserves, according to the Bill.
Its proposed sources of funding include an infrastructure margin that would form part of the prescribed petroleum pricing formula; a levy that may be imposed by Parliament on a petroleum product; fees paid by petroleum service providers for the use of infrastructure financed by the fund; and money approved by Parliament.
The fund would be managed by an Infrastructure Management Committee comprising a person with expertise in the petroleum downstream industry nominated by the minister as chairperson; a representative of the Ministry of Energy and Green Transition not below the rank of director; two NPA representatives; and representatives of BOST Energies, Bulk Import, Distribution and Export Companies (BIDECs) and Tema Oil Refinery.
LPG Promotion Fund
The LPG Promotion Fund would seek to promote the use of liquefied petroleum gas (LPG) in Ghana, including its use in vehicles, as well as the use of liquefied natural gas, compressed natural gas, biofuel blends, hydrogen and other non-fossil fuels, excluding electricity.
The fund would also support the promotion and implementation of the cylinder recirculation model and investment initiatives in support of the energy transition strategy within the petroleum downstream industry.
Proposed sources of funding include an LPG promotion margin in the prescribed petroleum pricing formula for LPG; a green transition margin in the pricing formula; an amount specified by the NPA to be charged as part of the supplier’s premium; a levy imposed by Parliament on a petroleum product; and money approved by Parliament.
The fund would be managed by an LPG Promotion Fund Management Committee, comprising the NPA chief executive officer as chairperson; the director responsible for finance at the NPA, nominated by the NPA chief executive; representatives of BIDECs and LPG marketing companies; a representative of LPG bottling companies nominated by the NPA board; a representative of the ministry; and an environmental civil society representative nominated by the NPA board.
Discover more from Energy News Africa
Subscribe to get the latest posts sent to your email.