No need to own cylinder: Pick up, pay for content

From September this year, residents of Accra and selected parts of the country do not have to own a cylinder to use gas.

Gas users only have to pick filled up cylinders and pay for the content, the Liquefied Petroleum Gas (LPG), after registering with their National Identity Card.

This is due to the phased implementation of the Cylinder Recirculation Model (CRM) being championed by the National Petroleum Authority (NPA) and its partners, under the supervision of the Ministry of Energy.

The rollout will begin in Accra and Kumasi next month and gradually spread across the country.

At a press briefing last Thursday, a Deputy Chief Executive Officer of the NPA, Perry Okudzeto, explained that the model had been well piloted, the system streamlined and the infrastructure was now in place to ensure the safe delivery and use of LPG across the operational areas.

“As part of this, the NPA commissioned a pilot programme with the existing infrastructure.

The pilot programme was done in the Eastern Region around the Kwaebibrem (Kade) area in the Ashanti Region within the Obuasi Zone and then in the Northern Region in the Yendi Zone,” he said.

“The programme taught us quite a number of lessons and that has gone into shaping the framework for the implementation of the new policy,” Mr Okudzeto added.

The Deputy NPA Chief Executive explained that the registration with the Ghana Card at the exchange points was important to collect data on consumers for traceability.

How CRM works

Ahead of the implementation in September, he said, four CRM Bottling facilities – GOIL Bottling Plant in Tema and Kumasi, as well the BlueOcean and Newgas facilities were ready to take off.

Also ready for the rollout are APPEB Cylinder Manufacturing Company in Awutu Senya, SIGMA Cylinder Manufacturing Company in Accra and the Ghana Cylinder Manufacturing Company at Spintex, which would be producing the cylinders to be distributed nationwide.

Per the CRM policy, cylinders procured from manufacturing companies would be sent to bottling plants to be filled.

Some officers of the NPA inspecting a cylinder manufacturing plant

The filled cylinders will be transported in bulk to exchange depots for holding and sorting before transporting them in quantities to cylinder exchange points where consumers can register and pay for any quantity for domestic and commercial consumption.

Specialised trucks will be used to transport the filled cylinders from the bottling plants to the retail stations or exchange points, where consumers will exchange their empty cylinders for filled up ones.

The CRM is to ensure that at least 50 per cent of Ghanaians have access to safe, clean and environmentally-friendly LPG by 2030.

It is also meant to improve access to LPG, improve safety in the distribution of LPG and to increase adoption of LPG.

Additionally, it is a policy shift to stop the unnecessary loss of lives and property, as well as gas filling stations, mostly due to human error.

“So far, since 2017, the first step has been to construct bottling plants that will be the main pivot around which the policy will operate, since under the new policy, cylinders are going to be filled with LPG and sent to exchange points for distribution,” Mr Okudzeto stated. 

Pricing

The NPA deputy chief executive stressed that the model would not affect the price of LPG.

“We are still going to use the same price build-up for the implementation of the policy.

What is going to change is the distribution network and how you access LPG.

Nothing in the price build-up is going to change,” Mr Okudzeto stated.

The CRM policy will have various sizes of cylinders displayed at the exchange points to enable consumers to buy any amount they could afford.

Mr Okudzeto said consumers would also not bear the responsibility for fixing faulty cylinders, adding “all we need from you is the Ghana Card and money to buy the LPG.”

Transition, engagements

The deputy chief executive further explained that the existing distribution module would continue to run alongside the model until a suitable timeline was agreed upon by all stakeholders for the withdrawal of the old system.

“We are still discussing the transition period.

Some people prefer 10 years, others want seven years, while some want five years.

There are varied views but the authority is looking at what is practical,” Mr Okudzeto stated.

“We are trying to accommodate everybody’s concern so that we can roll out smoothly.

Since we are going to run both policies side-by-side there’s the bulk load players and the new business for cylinder transportation until we find a suitable time for the transition,” he said.

Mr Okudzeto said all industry players had been engaged, their ideas had been taken on board and the framework had been designed with their inputs.

He said the industry players were ready to offer their support to ensure the success of the project.

“This is a policy that started in 2013, so players in this industry are very much aware of everything we are doing,” he said.

“Under this government alone, it’s been seven years of engagement,” he insisted, recounting the committee of 50 people, including LPG Marketing Companies (LPGMCs).

The NPA, Mr Okudzeto said, had also engaged the banks through their umbrella body, the Ghana Association of Bankers, for the role they would play in financing the investment by various actors.

“This we did because our industry mainly survives on finance and the engagement was to brief the banks on where we are in the implementation of the policy and what kind of support the industry and petroleum service providers require from the banks,” he explained further.

Licensing

Henceforth, the NPA will be moving to the next stage of licensing businesses to start marketing LPG on the new policy.

The NPA later led the media for a guided tour of the facilities at the GOIL Cylinder Recirculation Facility, a bottling company at Tema, and the Sigma Cylinder Manufacturing Company in Accra, where production was ongoing, to ascertain how ready the NPA was to roll out the project.

Also at the press briefing were the Director, Policy at the NPA, Dr Sheila Addo; the Director Corporate Affairs, Mariam Oquaye, and the Communications Manager, Mohammed Abdul Kudus, among others.