Surge in LPG price stalls clean energy adoption in transport sector – CEMSE says
The Centre for Environmental Management and Sustainable Energy (CEMSE) has sounded the alarm over a recent surge in Liquefied Petroleum Gas (LPG) prices, warning it could undermine progress in adopting cleaner energy within the transport sector.
In a statement issued on Monday, July 1, 2024, CEMSE highlighted the critical role of LPG in reducing emissions compared to traditional fossil fuels such as diesel and petrol.
“The recent introduction of US$80/MT on the Price Build UP (PBU) of LPG by the Ministry of Energy and the National Petroleum Authority established by LI 2481 amidst global price hikes of LPG negatively affects the transport sectors usage of LPG. The new PBU introduced since April 1, 2024 has made LPG in Ghana, the most expensive petroleum products far expensive compared to diesel and petrol.
“As at the second window of June, 2024, the average price of LPG was Ghc16/kg while the average price of diesel was about Ghc14.25/L and average price of petrol around Ghc14/L. The recent hikes in prices caused by NPA is shifting many LPG vehicle users into the use of unclean fossil fuels for their ICEs, and that inversely affects Ghana’s effort of achieving Nationally Determined Contributions,” quipped CEMSE.
LPG, comprising butane and propane, is touted as the cleanest and safest energy alternative for vehicles, contributing to a 15% reduction in carbon dioxide (CO2) emissions relative to other fossil fuels.
The global shift towards LPG has been notable, with approximately 23 million vehicles, or 4% of the world’s fleet, utilizing the fuel as of 2015. This number saw a 17% increase by 2019, underscoring the growing appeal of LPG in the automotive sector.
The outlook for the LPG and compressed natural gas (CNG) vehicle market remains robust, with an expected compound annual growth rate (CAGR) of 7.5% from 2022 to 2030. The transport sector’s consumption of LPG rose by 15% in 2022, with Russia, Poland, Korea, and Turkey leading the charge, collectively accounting for 50-58% of global LPG usage in transport.
Ghana has not been immune to this trend. The Driver, Vehicle and Licensing Authority (DVLA) reported over 32,000 vehicles running on LPG by 2022. The fuel’s cost-effectiveness and environmental benefits have driven its adoption, particularly among commercial vehicles in peri-urban regions.
These LPG-powered vehicles consume an estimated 15 kilograms of LPG daily, culminating in a monthly national consumption of approximately 14.4 million kilograms, representing about half of Ghana’s total LPG usage.
Despite these advancements, Ghana’s infrastructure for electric vehicles remains underdeveloped, with no established fast-charging points. Consequently, LPG remains a pivotal component of the nation’s strategy to curtail CO2 emissions from the transport sector.
However, the recent spike in LPG prices threatens to stall this momentum, posing a significant challenge to the country’s clean energy ambitions.
