‘Cylinder Recirculation Model may harm indigenous operators’

E.D.M. Stephens ACP (Rtd), Chief Executive Officer of Kaysens Gas Company Limited and Chairman of the Petroleum and Service Sector Taskforce Committee (PSSTC), has raised concerns about the financial implications of the Cylinder Recirculation Model (CRM) for Ghana’s Liquefied Petroleum Gas (LPG) sector. In a recent statement, Stephens warned that CRM could be a major financial burden on local LPG operators and potentially drive many out of business.

Stephens highlighted that the existing LPG plants, operated by indigenous Ghanaians, have invested over $400 million and provided employment to more than 10,000 workers. He argued that CRM, which he described as highly capital-intensive, is likely to favor foreign companies due to the substantial investment required. This, he said, risks sidelining local operators and leading to a significant outflow of foreign currency profits from the country.

He further noted that the current use of LPG in Ghana, which stands at nearly 30%, has been achieved through the efforts of existing local plants without CRM’s involvement. According to Stephens, the goal of achieving 50% LPG penetration by 2050 without including these established plants is unrealistic.

Stephens also expressed frustration over the interest from foreign nationals who have visited Ghana to study and replicate the existing LPG systems, suggesting that this underscores the inefficiencies and potential disadvantages of CRM.

Contrary to claims that the LPG Marketers Association has been uncooperative with the National Petroleum Authority (NPA) regarding CRM, Stephens asserted that the association has actively participated in discussions and pilot projects. He emphasized that the association is now advocating for a parallel system where both CRM and existing LPG plants can operate and compete. Stephens’ remarks reflect growing unease among local LPG operators about the potential impacts of CRM on their businesses and the broader industry.