The Chamber of Petroleum Consumers Ghana (COPEC), and the Consumer Protection Agency (CPA), have sued the National Petroleum Authority (NPA) over the introduction of the Cylinder Recirculation Recovery Margin (CRM).
In their writ of summons, the two organisations argue that the NPA did not seek the approval of Parliament and did not consult key industry players before introducing the levy.
The CRM will allow LPG operators to start charging 13.5 pesewas for each kilogram of LPG, but COPEC and CPA insist that the introduction of the levy was done arbitrarily, hence they pray the courts to direct the NPA to declare it “unlawful”.
“A declaration that the LPG cylinder recovery margin component of 13.5 Ghana pesewas per kilogram imposed by the defendants on 1st April, 2020, and which has resulted in an upward review in the price of LPG is a tax, as such defendants required the approval of Parliament to impose same.
“A declaration that the LPG cylinder recovery margin component of 13.5 Ghana Pesewas per kilogram imposed by the defendants on 1st April, 2020 leading to an upward review in the price of the LPG is inconsistent with the provision of ACT 691 AND LI 2186.” the letter noted.
COPEC and CPA also argues that new LPG levy has created some distress among the LPG Marketing Companies Association of Ghana (LPGMCs).
They are therefore, seeking from the court “compensatory damages and an order to the NPA to refund to consumers who have already been affected by the LPG cylinder recovery margin.”
Other demands
The two consumer interest groups are also praying the court to direct the NPA to “account for the total sum of money accrued so far from the imposition of the illegal LPG cylinder recovery margin and all other associated cost.
Additionally, they have also asked the court to direct the NPA to “publish the report on the LPG Cylinder Recirculation Model Programme before making any decision to extend the programme to cover the entire nation.”
CRM policy
On Wednesday, April 1, 2020, the NPA directed industry players to begin 13.5 pesewas charge on each kilogram of LPG.
It also instructed Oil Marketing Companies to increase the levy on Fuel Marking Margin from 3 to 4.5 pesewas per litre on every product.
This new directive was, however received with a pinch of salt, players in the industry say the levy will further burden the consumers.
But the NPA, on April 2, 2020, was cited in the Daily Guide Newspaper as saying the introduction of the levies, especially the CIM, is to support LPGMCs/OMCs ahead of the implementation of the cylinder Recirculation Model (CRM).
The NPA in March this year launched the pilot phase of the policy in Kade in the Eastern region and Obuasi in the Ashanti Region.
The policy is intended to change the current mode of gas distribution into a more secured and safe manner.
The policy is to ensure a surge in the usage of LPG from the current 25% to 50% by 2030.
As part of the CRM policy, the LPGMCs and OMCs will be responsible for the branding, safety and maintenance of the cylinders.
This means that consumers will no longer have to take an empty cylinder to be filled, they simply have to take their empty cylinders to an OMC/LPGMC and replace it with a filled one.
There will be different cylinder sizes from 3kg to 14.5kg to ensure that consumers pay for what they can afford.
A source at the NPA told the same Newspaper that the regulator is determined to support the LPGMCs and Oil Marketing Companies, and has consistently engaged and consulted them on all aspects of the implementation of the energy policy.
