We’re committed to reducing operational costs of LPG marketers – NPA

The National Petroleum Authority (NPA) has reaffirmed its commitment to easing operational expenses for liquefied petroleum gas (LPG) traders.

This commitment comes in response to concerns voiced by the LPG Marketers Association regarding the imposition of an $80 per metric ton (MT) fee on suppliers’ premiums, specifically aimed at bolstering bottling plant and cylinder investment margins.

Abass Ibrahim Tasunti, the head of Economic Regulation at the NPA, underscored the authority’s proactive approach to tackling industry hurdles and ensuring its long-term viability.

“Taxes are what usually generate revenue for governments. So if governments can generate taxes from elsewhere, then they can consider reducing some of the taxes on a particular product or service. And that is the appeal we are making. The other thing NPA has done, whilst waiting for the government to respond to the call for a reduction of taxes, is to find a way to introduce innovative ways to reduce the cost of LPG. So we started discussing with the BDCs that, if you look at the way we used to import LPG, you could have a BDC paying a premium to the international oil trader, up to about $100 per metric tonne. So we thought that if we consolidate the quantities of the BDCs, bring it together, and we do open competitive tenders, we could bring down the cost.

“So we had these discussions, we planned it, and we started in January this year. The first tender that we did in January to deliver quantity starting from March, we got the premium at $30 per metric ton. This is a huge drop. And we see that this is an advantage for us. So with this huge drop in the premium, the cost of importing LPG, this introduction of the $80 per metric ton helps to make it easy to accommodate the price.”