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Business News of Thursday, 9 April 2020

Source: Ghanaian Times

NPA dragged to court over cylinder recovery margin

Two corporate organisations have sued the National Petroleum Authority (NPA) at the Accra High Court for reviewing the price of Liquefied Petroleum Gas (LPG) on April 1, 2020, without parliamentary approval.

The Chamber of Petroleum Consumers (COPEC) and the Consumer Protection Agency (CPA), the plaintiffs, argued that the NPA and its Chief Executive, Mr Alhassan Tampuli, introduced a new component known as LPG cylinder recovery margin (CRM) without resolution of the NPA board.

The plaintiffs stated that the CRM, which is 13.5 pesewas per kilogramme of the LPG, had resulted in an upward review of prices of LPG at the pumps.

The plaintiffs claimed that the CRM was contrary to the procedure provided for under the relevant laws, namely Act 691, the National Petroleum Authority (Prescribed Petroleum Pricing Formula) Regulations, 2012 (LI 2186) and articles 23 and 296 of the 1992 Constitution.

The plaintiffs contended that the procedure provided for under the relevant laws for the review of the petroleum pricing formula, imposed an obligation on the NPA to engage in consultations with the petroleum service providers before effecting any reviews, but the NPA failed to do so before communicating to the service providers the new component.

The plaintiffs said the NPA had a duty to cause the new formula to be published in the gazette and two other newspapers of national circulation after Parliamentary approval, but this was not done before the NPA boss hastily announced the new formula, even without a board resolution or approval.

It said the failure of NPA to consult with the service providers before the introduction of the new pricing formula had led to agitations among such service providers, particularly, the LPG Marketing Companies Association of Ghana (LPGMCs), who have issued a statement calling the NPA to withdraw the CRM.

They contended that Mr Tampuli breached the procedures for reviewing the prescribed petroleum pricing formula because he was in a haste to implement the CRM which is a component of the Cylinder Recirculation Model Programme.

The plaintiffs asked the court to make Mr Tampuli to personally suffer the consequences of his unlawful actions including the cost of the suit to deter others.

They alleged that Mr Tampuli has a personal interest in the Cylinder Recirculation Model Programme and is determined to force its implementation on Ghanaians whether or not the results from the pilot supports a nationwide scale or not.

The plaintiffs asked the court to order NPA to first publish the report on the LPG Cylinder Recirculation Model Programme before making any decision to extend the programme to cover the entire nation.

They urged the court for an order directed at the NPA to account for the total sum of money accrued from the imposition of the illegal LPG cylinder recovery margin.

An order directed at the NPA to refund to consumers who have been affected by the LPG cylinder recovery margin.

The corporate bodies asked the court to declare that the LPG cylinder recovery margin component of 13.5 pesewas per kilogrammes imposed by the defendants on April, 2020, inconsistent with the provision of Act 691 and LI2186.

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