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LPG Stations Face Closure…   
 
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07-Oct-2015  
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The Finder has uncovered plans by government to phase out all 593 existing liquefied petroleum gas (LPG) refill outlets in urban and peri-urban areas. 

What is even worrying is that foreigners with huge capital will be offered licenses to set up what the government calls professionally-operated LPG refill plants in urban and peri-urban areas.

Under this plan, hundreds of millions of cedis invested by Ghanaians operating LPG refill stations, as well as LPG importers, will go down the drain while hundreds of employees will also become jobless.

These are contained in a Ministry of Petroleum draft document titled ‘National Policy on Liquefied Petroleum Gas (LPG) Promotion’.

In the draft policy document, dated March 30, 2015, the government is to facilitate the construction of major refilling facilities in strategic areas that would be determined by the Ministry of Petroleum.

The document was signed by Deputy Minister of Petroleum Benjamin Dagadu and distributed to Chief Executive of National Petroleum Authority (NPA), Chief Executive of Petroleum Commission, Chief Executive of Ghana National Petroleum Corporation (GNPC), Chief Executive of Ghana National Gas Company, Managing Director of Tema Oil Refinery (TOR), Managing Director of  Bulk Oil Storage and Transportation Company (BOST), Managing Director of Ghana Cylinder Manufacturing Company, Chief Executive of Chamber of Bulk Oil Distributors (CBOD), and Industry Co-ordinator of Association of Oil Marketing Companies (AOMCs).

Indigenous Ghanaian private investors who have invested heavily in LPG distribution outlets have expressed shock at the government’s plan.

When contacted by The Finder, some of them said they do not have any idea about the draft policy.

Speaking on condition of anonymity, operators of LPG stations told this paper that considering the huge investments made into infrastructure in the sector, phasing out existing LPG distribution outlets would push all of them into debt.

According to them, they took huge loans from banks to set up their stations, and are under obligation to pay such loans.

They were surprised that the same government that encouraged them to put their money into LPG stations not too long ago is scheming to close them down.

Apart from supporting the national economy with products, these private investors provided employment for hundreds of Ghanaian who hitherto would have been on the streets.

Under the then price regulated market, these investors pile up debts in the form of price under recovery and foreign exchange losses running into millions of dollars, with the hope that the government will pay the debts incurred in their bid to support the economy and also keep their businesses running.

LPG importers noted that, currently, they are unable to bring in products because of government’s indebtedness, which runs into millions of dollars.

Consequently, there are pockets of LPG shortages in the country, and areas affected include Achimota, Tema, Ashaiman, Adenta, Santa-Maria Last Stop, Dzorwulu, Madina, Dansoman, Kwame Nkrumah Circle, East Legon, Kaneshie and Sege, as well as parts of the Eastern and Volta regions.

What is painful is that instead of government paying them, it is rather using the money to empower Bulk Oil Storage and Transportation Company Limited (BOST) to bring in LPG.

“The government should not suffocate these private investors to death as they have done no wrong in helping to keep the economy going when the going was tough,” one of them said.

 They asked if BOST was still a strategic stockholder for the country or a commercial entity.

The LPG operators questioned if BOST was now a commercial entity competing with private investors and why we still have the BOST margin in the petroleum price build up.

“Why must the poor Ghanaian continue to pay BOST margin anytime he/she buys products at the pump?” one investor asked.

“Why are we empowering BOST with such margins only to compete with private investors, and what has become of BOST as a strategic stockholder?” another stakeholder asked.

In view of the situation, the industry players wondered where the strategic stock will come from should there be any crisis, and whether government is sure BOST is making profit as we are being made to believe?

“We can only hope that we do not have ‘BOST DEBT RECOVERY’ come tomorrow,” an angry investor said.
 
 
Source: The Finder
 
 

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