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NPA reviews LPG importation processes for efficiency and cost saving

January 26, 2024

The National Petroleum Authority (NPA), on Monday, January 29, 2024, successfully conducted the country’s first Open Competitive Tender for LPG imports.

The winning tenderer offered the lowest premium of USD 30.39/MT for the four lots tendered for March to June 2024. This is a huge decrease from the current premiums, which vary between USD 67/MT and USD 98/MT. Each lot is approximately 20,000 metric tonnes.

According to the NPA, the move to employ open competitive tenders for LPG imports is intended to lower costs while increasing efficiency.                                                                             

The Authority said the idea for open competitive bidding was adopted following consultation with Bulk Import, Distribution, and Export Companies (BIDECs), with majority of them in support.

The NPA noted that the quantity tendered every month accounts for about 70 percent of Ghana’s monthly LPG use, with the rest supplied by the Ghana National Gas Company (GNGC).

The regulator explained it proposed using Open Competitive Tenders for LPG importation in 2021 to, among other things, increase efficiency in LPG imports into Ghana as well as reduce LPG costs through competition.

This was one of the strategies proposed to help reduce the cost of LPG in order to execute the Cylinder Recirculation Model (CRM), which includes affordability as a key component for effective policy implementation. “The proposal was thoroughly discussed in-house to assess its feasibility, and after it was concluded that it would help reduce the cost of importing LPG, approval was granted to engage with the BIDECs (in 2023) to get their buy-in before its implementation”, a statement from the NPA said

Source: Energy Ghana