In the wake of the tragic 2017 gas explosion at the Atomic Junction gas refill station in Accra, the government of Ghana urgently sought a solution to enhance safety in the Liquefied Petroleum Gas (LPG) sector, with the Cylinder Recirculation Model (CRM).
The policy was designed to centralize high-pressure filling away from neighborhoods and increase access to clean cooking fuel.
However, a detailed analysis in IMANI Africa and ATLAS Network’s latest research titled “Promoting Economic Freedom: Addressing the Impact of Government Interventionism on Free Market Principles in Ghana”, reveals that this safety-driven intervention carried immense economic risk.
The CRM has the potential to collapse 12,000 jobs, marginalize local businesses, and the emergence of a highly concentrated, foreign-affiliated market structure.
The Human Cost: 12,000 Jobs on the Line
According to IMANI, the introduction of the CRM, which mandates the exchange of pre-filled cylinders rather than the traditional refill model, was seen by many established players as an “existential threat”.
Local LPG operators, who have invested substantially in existing infrastructure over decades, feared that the rapid transition would eliminate or restructure roles, potentially leading to job losses for more than 12,000 people employed by the conventional distribution system.
“The possibility of sidelining long-established providers in favour of newer and allegedly foreign-owned players generates economic uncertainty. Additionally, estimates suggest that more than 12,000 jobs depend on the current system; hence, the rapid implementation of the CRM might lead to job losses if traditional filling station roles are eliminated or restructured without appropriate compensation mechanisms,” the research revealed.
It also added that, “Existing LPG marketers and tanker drivers also fear that the new model will reduce their roles.”
Furthermore, traditional operators faced daunting financial barriers. While bottling plants received an approved margin of $80 per metric ton (MT) under the Fees and Charges Act, this amount often fell short of covering the high transition cost of complying with CRM’s stringent technical and branding requirements.
Smaller operators and traditional retailers, lacking the necessary capital buffers, found themselves unable to participate, raising the prospect of their forced exit from the market.
The Threat of the Duopoly
One of the most impactful industry concerns is the fear that the CRM policy was setting the stage for market concentration, favoring a few well-capitalized players.
Marketers, IMANIA says, warned that the initial phase of CRM privileged two major bottlers, which were Blue Ocean, operated by Puma Energy, and Sage Petroleum, also operated by Quantum Group/Arch Holdings. The research findings add that marketers specifically worried that this emerging duopoly would “entrench market power” and “stifle price competition” by limiting distribution rights for smaller, independent marketers.
Blue Ocean, identified as foreign-affiliated, along with other large players like GOIL and Sage, operate vertically integrated structures that include Bottling Plants, Bulk Distribution Companies (BDCs), and Oil Marketing Companies (OMCs).
IMANI says industry associations argue that this allows these established giants to create an unfair advantage, creating a “protected zone for incumbent giants”. Operators lamented that this regulatory approach was perceived as creating space for new entrants “at the expense of established players”.
The Consumer Dilemma: Trading Safety for Affordability
The research further reveals that for the Ghanaian household, the CRM introduced a major problem of affordability and access, particularly for low-income families. The core requirement of exchanging a full cylinder clashes with the flexible purchasing habits of vulnerable consumers who rely on buying gas in smaller quantities to suit their daily or weekly budgets.
This lack of pricing flexibility presents a high risk of exclusion. The average price of LPG (GH¢12.60 per kilogram in 2023) is already over four times the cost of using charcoal (GH¢2.84 per kilogram).
It is predicted that if the standardized exchange model excludes low-income users, the policy risks pushing them back toward cheaper biomass fuels like charcoal and firewood, thereby reversing gains in public health and environmental outcomes.
Interestingly, IMANI reveals that the data available confirms this challenge. While urban LPG adoption is relatively high at 36.4% in 2022, rural adoption remains marginalized, rising only marginally to 7.1%.
Coexistence, But No Consensus
The National Petroleum Authority (NPA) initially drove CRM implementation hard, with operators criticizing its “adversarial regulatory style”, including the sudden reclassification of long-standing, safety-compliant refill stations as “high-risk”.
LPG operators asserted that this tactic was used to compel rapid CRM adoption.
However, the pressure on operators was somewhat relieved by late 2025. The Ministry of Energy and the NPA announced in November 2025 that the CRM and the existing LPG refill model would operate concurrently and indefinitely to safeguard long-standing private investments.
However, IMANI noted that despite this crucial assurance of coexistence, deep concerns remain. Stakeholders across the board agree that the CRM lacked a “solid empirical foundation” before its rollout, as no systematic consumer feedback or formal risk-benefit analysis was conducted.
This gap, coupled with the lack of a formal Memorandum of Understanding (MoU) to formalize roles and compensation for existing marketers, continues to fuel a “trust deficit” between regulators and the industry.
