Concerns are growing that ongoing disputes among key players in the Liquefied Petroleum Gas (LPG) industry could lead to supply disruptions. LPG Marketing Companies have decided to cease business relations with SAGE Petroleum (Quantum Terminals) and Blue Ocean depots in Tema. These two companies, which were major suppliers of LPG to the marketing companies, have recently entered the LPG cylinder recirculation market, effectively becoming competitors. The marketing companies view this move as unfair and have urged their members to stop purchasing from SAGE Petroleum and Blue Ocean.
Although LPG supply has remained stable so far, there are fears that if the dispute is not resolved, it could result in product shortages. The Chamber of Bulk Oil Distributors (CBOD) recently expressed concern over the marketing companies’ decision, calling it counterproductive.
In a statement, CBOD emphasized that the operations of SAGE Petroleum and Blue Ocean are fully compliant with the National Petroleum Authority (NPA) Act 691 and stated that there is “nothing illegal” about their activities. CBOD expressed support for Quantum Terminals and Blue Ocean, urging a swift resolution that benefits all parties involved. The Chamber called on LPG marketing companies to collaborate with regulators and stakeholders, stressing that no player in the industry poses a threat to another, and that the market will naturally phase out those who fail to innovate and evolve. CBOD highlighted the importance of cooperation to achieve nationwide access to safe LPG by 2030.
However, CBOD’s call for cooperation may be ignored as LPG marketing companies view the NPA as a biased regulator. Currently, LPG is sold in two main ways: cylinder refill and cylinder recirculation. The NPA aims to gradually phase out the cylinder refill model over time, considering it less safe. However, operators have resisted this policy, arguing that their significant investments would be lost and many jobs would be at risk. As a result, both systems are currently operating side by side.
But the NPA has been promoting the cylinder recirculation model, which has caused friction between the marketers and the regulator. In response, marketers have sponsored advertisements promoting their own mode of operation, further highlighting the rift between them and the regulator. The tension has been exacerbated by the recent issuance of licenses by the NPA allowing SAGE and Blue Ocean, previously just bulk distributors, to enter the cylinder recirculation market.
With marketers suspecting that the NPA is attempting to push them out of business, they are unlikely to view the regulator as an impartial mediator in the current dispute. As the conflict continues, the potential for supply disruptions remains a significant concern.
