NPA announces rollout of cylinder recirculation model for LPG marketing companies
The National Petroleum Authority (NPA) has formally notified LPG marketing companies in Ghana about the forthcoming implementation of the first phase of the government’s nationwide Cylinder Recirculation Model (CRM), scheduled to commence from the Greater-Accra and Ashanti regions in September 2023.
In a communiqué dated July 7, 2023, signed by Deputy CEO Curtis Perry Okudzeto and addressed to All LPG Marketing Companies, the NPA conveyed its intention to extend the program progressively to other regions in subsequent phases.
The CRM was initially introduced by the energy ministry in October 2017 to revamp the marketing and distribution of Liquified Petroleum Gas (LPG) in the country, aiming to ensure that at least 50% of Ghanaians have access to safe, clean, and eco-friendly LPG for domestic, commercial, and industrial purposes by 2030. The NPA was entrusted with the responsibility of constituting an implementation committee to plan, oversee, and ensure the successful execution of the CRM.
As part of the CRM implementation process, LPG cylinders will no longer be filled at filling stations as conventionally practiced. Instead, they will be pre-filled at designated bottling plants and then distributed to various exchange points, where consumers can replace their empty cylinders with filled ones.
To prepare for the main CRM implementation, the NPA has formulated strategies in conjunction with the committee and undertaken essential activities, including the development of a regulatory framework comprising licensing structure, pricing structure, HSSE (health, safety, and security environment) guidelines, and operational standards. A pilot program was conducted on parts of the value chain in four regions of the country in March 2020.
The upcoming phase of the CRM implementation will involve the filling of domestic cylinders with LPG at the Bottling Plants and their subsequent distribution to consumers at Cylinder Exchange Points (CEPs). This first phase is set to launch in the Greater-Accra and Ashanti Regions in September 2023, with plans to extend the implementation to other regions in subsequent phases.
As part of the preparation process, the NPA will conduct a comprehensive reassessment of all LPG Refilling Outlets in the country, beginning with the Greater Accra and Ashanti Regions. The outlets will be classified into high, medium, and low-risk categories, with medium and low-risk outlets being considered for operation as Autogas Stations, catering exclusively to vehicles using LPG as fuel. On the other hand, high-risk outlets will function as Cylinder Exchange Points.
The outcomes of the assessment exercise will be communicated to relevant stakeholders, influencing the next steps in the CRM implementation. The NPA has requested cooperation from LPG marketing companies to facilitate the smooth and successful execution of the reassessment exercise.
As Ghana gears up to usher in the Cylinder Recirculation Model, market participants and industry players eagerly anticipate the impact of this ambitious and transformative policy directive on the nation’s LPG distribution landscape.
