The National Petroleum Authority (NPA) is pushing to introduce a new levy on liquefied petroleum gas to support the cylinder recirculation program and prevent cost pressures from being passed on to consumers, according to the head of the downstream petroleum regulator.
Godwin Edudzi Tameklo, Chief Executive of the NPA, said Parliament approved a “Cylinder Reinvestment Margin” of about $80 per metric ton of LPG to finance the policy.
“We also now have what is known as the Cylinder Reinvestment Margin,” Tameklo said during an engagement with Parliament’s Energy Committee. “The whole essence is to absorb the costs relative to the cylinder recirculation model because you do not want the big bottling companies and among others, if they invest, the state must find a way of compensating.”
The measure is designed to support Ghana’s transition to a centralized cylinder management system, where the state and private operators share responsibility for distribution and maintenance. Without the margin, Tameklo warned, companies would pass investment costs directly to consumers.
Ghana has long promoted LPG as a cleaner alternative to firewood and charcoal, particularly in rural areas where deforestation remains a concern. However, the expansion of LPG use has also exposed structural challenges in the subsidy regime, particularly as the fuel has increasingly been diverted to commercial uses.
“Unfortunately, came the concept of auto gas. People now started changing their cars into the use of LPG among others. So they were using it for commercial purposes and you have to do what? The state have to pay for it,” Tameklo said.
The regulator said the shift has undermined the original intent of subsidies aimed at households, with high-consumption users such as taxis and commercial operators benefiting disproportionately.
“When you go and buy 14 kilos of gas, you can use it for a month, a typical household. But have you seen these taxis and the cylinders at their back? Huge. And within a week, it’s done,” he said.
The new margin is expected to realign the LPG market, ensuring that investments in infrastructure and distribution do not inflate consumer prices while maintaining incentives for private sector participation.
Tameklo noted that commercial adoption of LPG has expanded beyond transport, with businesses such as hotels increasingly operating dedicated gas systems.
