New Gas cylinder recirculation model to assume full implementation

Despite, concerns raised by the operators of Gas refill outlets in the country against the government’s new policy of gas cylinder recirculation, all indications points to the full implementation of the program soon.

This is due to inference from government communications on the new policy which has been against by the gas refilling outlet operators.

According to the government, full implementation of the Cylinder Recirculation Model, which is expected to begin this year, will create an estimated 4,500 new jobs along different levels of the supply chain.

An official statement from the Corporate Affairs Division of the National Petroleum Authority (NPA) said: “Direct job losses are estimated to be about 400 in relation to the estimated number of refilling plants that will be converted to Auto-gas outlets. Direct job creation is however estimated to be over 4,500 in relation to new jobs.

“This does not affect current jobs of LPG Bulk Transporters, LPG Bulk Distribution Companies, and LPG Bulk Storage companies, or the retail outlets that will transition into distribution centres.”

The NPA will also recruit over 200 Safety Auditors throughout the country, while it will resource its newly-established Health Safety, Security and Environment (HSSE) department resulting in more job opportunities. There will be a number of indirect jobs created for installations, maintenance, fabrication and other services, the NPA said.

“In terms of remuneration, the new jobs are expected to even offer better remuneration because we anticipate the demand for LPG to increase – which translates into higher profit margins for the players and thereby results in higher wages,” the statement added.
Also, as part of the full implementation of the gas cylinder recirculation model by the National Petroleum Authority (NPA), it has said it would recall all cylinders currently in use.

This is to help regulate the program and improve standards and access to gas for domestic use purpose

The new gas cylinder filling policy to avoid setting up of gas refilling outlets populated areas in the various towns and cities.

The CEO of the NPA, Hassan Tampuli explains that recall of recirculation cylinders is the stage of full implementation of the program.

“There is a stage in the implementation regime; the total cylinder recall. We will recall cylinders in the system and we will trade them off and then we will retire cylinders which do not meet the safety parameters,” he told Citi Business News at the NPA’s downstream colloquium on Wednesday, January 31, 2018.

The cylinder recirculation model has become apparent due to efforts to avert fire disasters at fuel refill stations.

The program also comes on the back of a cabinet decision arrived at in October last year after the fire disaster (gas explosion) at a fuel station at Atomic Junction in the Greater Accra region in October.

Under the model, LPG Bottling Plants will be sited away from congested commercial and population centers and will procure, brand, maintain and fill empty cylinders to be distributed to consumers and households through retail outlets.

Mr. Tampuli maintains the recall which will commence by the end of this year, will be done gradually.

According to him, this is to ensure that the marketing companies are not faced with any challenge of possible shortage of cylinders with the rolling out of the program.

“The cylinder will be procured, owned and branded by the (LPG) marketing companies. So a customer will only have to take an empty cylinder to a retail outlet and get a filled one. If you want any size – if you want 3 kilos, 6 kilos, 9 kilos, 12 kilos; depending on the depth of your pocket, you can get any cylinder that you want that will meet your pocket.”

The NPA revealed that the committee, set up in November last year to facilitate the model’s implementation, has concluded the roadmap for it to be carried out by three sub-committees.

“To facilitate implementation of the roadmap, three sub-committees have been formed to undertake the following activities: develop a new LPG pricing structure; develop a new license, permit and legal framework; and to develop new Health, Safety, Security and Environment (HSSE) procedures,” the statement read.

The sub-committees have begun work and are expected to conclude by the first quarter of 2018.

Announcement of the Cylinder Recirculation Model, last year, was met with strong opposition from the Liquefied Petroleum Gas Marketers (LPGMCs) and the Ghana Liquefied Petroleum Gas Operators Association (GLiPGOA).

There were fears that the new arrangement would lead to job losses and create inconvenience for LPG users. However, the NPA says it has, together with the Ministry of Energy, had a series of engagements with both groups to address concerns and incorporate their feedback into implementing the model.

According to the statement, the Cylinder Recirculation model will be implemented alongside the old model of LPG distribution – with the latter being phased out by the end of the year.

Government, in October 2017, introduced the Cylinder Recirculation Model following a gas explosion at Atomic Junction in Accra, which resulted in the death of 7 people and injuries to 132 others.

Among other stringent measures to ensure safety in the handling of petroleum products, the NPA was issued a directive to implement the Gas Recirculation Model within a year.

Earlier, Operators and workers within the Liquefied Petroleum Gas retailing business had registered their fear of losing their jobs with the implementation of the new cylinder recirculation policy.

This is due to the fact that, operators of the LPG business suspecting they are being sidelined with implementation of the new policy.

The new policy will entail that, all the gas cylinder filling outlets are relocated to designated locations out of the reach of residences who will now serve as middlemen, whiles new entities or players will go to them with standardized cylinders to fill and come to sell to domestic users.

This may render ten thousands of Ghanaians who currently work with the refill outlets unemployed.

The Vice-Chairman of the LPG Marketers Association, Gabriel Kumi disclosed that layoffs will be the ultimate fate following the inability of their members to sustain their operations due to non-participation in the cylinder recirculation program.

He, therefore, reaffirmed the need for the members to be considered and migrated onto the new policy.

“We employ close to 7000 Ghanaians. So if there is a new policy that doesn’t directly absorb us into the value chain, all our people will likely lose their jobs and we want to avoid that. People we’ve employed will keep their jobs if we’re properly restored into the value chain,” he stated.

At a meeting to address the concerns of the LPG Marketers association on December 20, 2017, a Deputy Minister of Energy Dr Mohammed Amin Adam, directed all parties involved in the cylinder recirculation policy, to head back to a committee set up to implement the policy.

The Association a few weeks ago gave government an ultimatum to meet with them and discuss moves to implement the policy and its impact on their services.

The deadline notice, which elapsed on December 13, 2017, was served Government by the LPG Marketing Association, after several attempts to secure a meeting with the Energy Minister failed.

Story: Adnan Adams Mohammed