NPA set to roll out Cylinder Re-circulation Model in September
From September 2023, residents of Accra and other areas in Ghana will not have to own a cylinder to use gas.
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Gas users only have to pick up 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 implementation of the Cylinder Re-circulation Model (CRM) being championed by the National Petroleum Authority (NPA) and its partners, under the supervision of the Ministry of Energy.
Roll out will begin in September in Accra and Kumasi and will gradually spread across the country.
Why CRM?
The implementation of 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 properties as well as gas filling stations, mostly due to human error.
At a press briefing on Thursday, [August 3, 2023], a Deputy Director of the NPA, Perry Okudzeto explained that the model had been well piloted, the system streamlined, the infrastructure now in place to ensure the safe delivery and use of LPG across the operational areas.
How the policy works
Per the policy, cylinders procured from manufacturing companies would be sent to Bottling Plants to be filled. The filled cylinders will be transported in bulk to exchange to 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.
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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 ones.
Pilot project
“So 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 Kwaebibem area, in Ashanti Region in Obuasi zone and then in the Northern Region in the Yendi zone. 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. Okudjeto said at the press briefing.
Readiness
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 roll out are APPEB Cylinder Manufacturing Company in Awutu Senya, SIGMA Cylinder Manufacturing Company in Accra and the Ghana Cylinder Manufacturing Company at Spintex, which will be producing the cylinders to be distributed nationwide.
“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,” he narrated.
“As we speak, four bottling plants are ready for operation which we shall see and inspect later after this briefing, to show you their readiness for the take-off of the new policy. Essentially, today’s engagement is to brief the media and to introduce you to the various players down the value chain to show you how ready industry is for our September roll out of the new policy,” he added.
Pricing
Mr Okudzeto mentioned that in terms of pricing, nothing would change saying: “We are still going to use same price build up for the implementation of the policy. Price build-up of LPG remains the same. What is going to change is the distribution network and how you access LPG. Nothing in the price build up is going to change.”
He said the CRM policy would have various sizes of cylinders displayed at the exchange points to enable consumers buy which ever one they could afford.
Production of cylinders is currently ongoing at the SIGMA Cylinder Manufacturing Company in Accra
On faulty cylinders he said even if a consumer’s cylinder was faulty, he or she bears no responsibility for fixing it and does not even need to own a cylinder to access LPG adding “all we need from you is the Ghana card and money to buy the LPG.”
He added that the registration with the Ghana card at the exchange points was necessary to have data on consumers for traceability.
Transition from old to new policy
The existing distribution module will continue as the authority intended to run both policies side-by-side until a suitable timeline is agreed upon by all stakeholders for the withdrawal of the old system.
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“We are still discussing the transition period. Some people prefer 10-years, others want 7-years while some want 5-years. There are varied views but the authority is looking at what is practical. So in due cause we will engage our players and agree on timelines for the transition, he explained.
“We are trying to accommodate everybody’s concern so that we can roll out smoothly. We are going to run both policies side-by-side so there’s bulk load people and there is new business for cylinder transportation until we find a suitable time for the transition,” he said
Stakeholder engagement
On stakeholder engagement, Mr. Okudjeto was of the view that all industry players had been engaged, their ideas had been taken on board and the framework had been designed with their input and 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. Under this government alone, it’s been seven years of engagement. There was a committee of 50 people including LPG Marketing Companies (LPGMC). The committee had representation from all relevant stakeholders. So they I understand that moving from an old policy to a new one, there may be apprehensions but most of the issues that have been raised have been addressed and I am sure most of the LPGMCs are in support of this new policy and are willing to work hand-in-hand with the regulator.”
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Central Depot Manager at GOIL Cylinder Recirculation Model Facility at Tema, Eric Govina explaining their readiness for the roll out of the project during a tour of the facility last Thursday
“Also as part of our preparatory activities, various stakeholders who will play key roles in the roll out of CRM have been engaged notably the Ghana Association of Bankers. This we did because our industry mainly survives on finance and the engagement was to brief the Ghanaian 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
On licensing he said “from now onwards we are licensing people to start marketing LPG on the new policy and we hope that with the implementation of this new policy we will be able to solve many problems."
The media was later invited to inspect the facilities at the GOIL Cylinder Recirculation Facility at Tema and the Sigma Cylinder Manufacturing Company in Accra, were production was ongoing, to ascertain the NPA’s readiness to roll out the project.
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In attendance were Director, Policy at the NPA, Dr. Sheila Addo, Director Corporate affairs, Mariam Oquaye, Director Research Monitoring and Evaluation Dr. Joseph Wilson and Communications Manager, Mohammed Abdul Kudus.
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