Business News of Friday, 4 August 2017
The LPG Marketing Companies Association of Ghana, Ghana LPG operators Association(GLiPGOA), Ghana LPG Tanker Owners Association and Ghana LPG Table Drivers Union are challenging the decision by the National Petroleum Authority (NPA) to disallow the refilling of cylinders at LPG outlets across the country.
According to the Ag. NPA CEO, Hassan Tampuli, instead of the LPG outlets, all gas cylinders will be filled by cylinder bottling plants for onward delivery to retail outlets.
But the association, in a statement, questioned whether the cylinder bottling plants are immune from explosion. The group said the NPA had so far failed to provide explanation regarding how the new dispensing plants would be free from explosion.
“Mr Tampuli, however, failed, or deliberately ignored to explain to the general public how his proposal will prevent gas explosion. Are these cylinder bottling plants explosion-free or explosion-proof? The answer is an obvious NO. One could just imagine the repercussions and consequences of an explosion at a single bottling plant,” the group said.
This article seeks to analyse and examine the statements and proposals put forth by Mr Tampuli from two perspectives. The first perspective and issue to deal with is the question, ARE these cylinder bottling plants explosion-free? The second perspective will also raise the question, what then becomes of the current lpg dispensing outlets?
Mr Tampuli was emphatic that the policy his outfit sought to implement was one aimed at preventing gas explosions. To achieve that aim, Cylinder Bottling Plants would phase out the current Dispensing Outlets. Mr Tampuli, however, failed, or deliberately ignored to explain to the general public how his proposal would prevent gas explosion. Are these cylinder bottling plants explosion-free or explosion-proof? The answer is an obvious NO. One could just imagine the repercussions and consequences of an explosion at a single bottling plant.
Per his proposal, it could so happen that one bottling plant could serve about 3000 cylinders at a time. An explosion at such a place will be far devastating, compared to one at a dispensing outlet. We pray against such occurrence. One can only imagine the extent of gas shortage should such an explosion occur. Mr Tampuli, it will be in your own interest and the interests of all Ghanaians that you take a second -glance at your proposal, it will help.
The second issue and perspective is to examine the position of the current players in the gas dispensing sector should Mr Tampuli go ahead with the implementation of his policy.
The use of LPG started around the late 1980s, and its consumption keep rising steadily over the years. The figures show that the overall consumption had risen from 5,267 tons in 1989 to 32,000 tons in 1996 and had been exceeding 200,000 tons since 2011. Dispensing Outlets and Trucks have been the main marketing and distribution outlets for the LPG.
The operation of the Dispensing Outlets is an established business sector, giving employment to over 6000 Ghanaians. Currently, there are about 700 LPG Dispensing Outlets in operation across the nation. About 300 LPG trucks are employed in the sector, each truck having a market value of about GH¢400, 000.00. An estimated amount of GH¢ 700,000.00 is needed to establish a Dispensing Outlet. It is very clear that a lot of investments have been sunk into this sector by the operators, and the investment continues to grow and deepen.
Construction of a single bottling plant cost over 1 million dollars, and it’s an obvious truth that none of the current players in the sector will be able to construct a single bottling plant. Foreign companies with huge financial base will directly or indirectly takeover the sector to the detriment of local players. Mr Tampuli, it’s your duty to ensure active participation of locals in the Petroleum Downstream Sector. You should be seen to be promoting local content.
It’s very obvious that Mr Tampuli’s policy will collapse the current dispensing outlets. It is also very clear that his policy has no place for the current dispensing outlets. The consequences will be dire: huge investments will be lost, over 6000 people will be jobless, and there will be no use for the LPG trucks and over 300 drivers. Banks will find it difficult recovering loans granted to these operators. Mr Tampuli, if you truly seek to minimise or prevent gas explosions, the bottling plants can’t be the solution, and resorting to it can only be described as ostensible. Eyes are watching.
Regular education and checks at the dispensing outlets is one big solution to prevent or minimise explosions. Strict adherence to safety procedures and processes are also key. Engage the current players more, and interrogate their circumstances and operations. That will help in your quest to minimise or prevent explosions.