LIQUIFIED PETROLEUM GAS (LPG) PROMOTION:
THE GHANA EXPERIENCE
PRESENTATION AT:
UNDP/WORLD BANK-ENERGY AND
POVERTY W’KSHOP
ADDIS ABABA, ETHIOPIA
BY:
EMMANUEL A. QUAYE – FOLI
MINISTRY OF ENERGY
GHANA
OCTOBER 2002
SNAPSHOTS OF THE ENERGY SCENE
IN GHANA
TYPE OF FUEL 1983 1990 2000
GASOLINE 207000 351000 410000
KEROSINE 132000 172000 173000
DIESEL 252000 308000 412000
RFO 37000 19000 50000
LPG 3000 7000 26000
ELECTRICITY 308000 411000 529000
WOODFUEL 2339000 3745000 4795000
CHARCOAL 0 414000 674000
* consumption in toe **source: PETROTECH
SNAPSHOTS OF THE ENERGY SCENE IN GHANA
5000000
4500000
4000000
3500000 GASOLINE
3000000 KEROSINE
DIESEL
2500000 RFO
2000000 LPG
ELECTRICITY
1500000 WOODFUEL
1000000 CHARCOAL
500000
0
1983
1990
2000
Consumption in toe
Source: PETROTECH
ENERGY CONSUMPTION IN GHANA
(source: W. A. Togobo/MoEn)
PETROLEUM
18%
BIOMASS
69%
ELECTRICITY
13%
GROWTH IN ENERGY CONSUMPTION (1990-2000)
FUEL TYPE % GROWTH PER YEAR
GASOLINE 1.5 –4.0
KEROSINE 0.2
DIESEL 1.2 –1.3
RFO 0.6
LPG 14.0
ELECTRCITY 10
WOODFUEL 2.5 –3.0
CHARCOAL 3.0 –5.0
GHANA’S LPG SOURCE
• LPG is produced from the Tema Oil
Refinery(TOR)
• It is a mixture of 70% propane and 30%
butane
• The country currently requires about 45,000
barrels of crude per day
• About 27% of total export earnings spent on
petroleum products in 2000
LPG PRODUCTION AND SUPPLIES BEFORE THE
PROMOTION EXERCISE
YEAR DEMAND PRODUCTION IMPORTS EXPORTS
‘000 kg ‘000 kg ‘000 kg ‘000 kg
1981 6,388 6,809 - 162
1982 6,529 7,085 - 141
1983 3,098 3,251 - 0
1984 4,351 4,708 - 663
1985 4,137 5,732 - 987
1986 4,713 6,243 - 1,510
1987 4,627 6,447 - 1,692
1988 4,939 5,861 - 240
1989 6,387 6,895 - 885
*source: PETROTECH
According to the Ghana Living Standards
Survey (GLSS) of 1988:
• Only 4.8% of the population in Accra
used LPG.
• Only 0.8% of the population in other
urban areas used LPG.
• Nobody in the rural areas used LPG.
CONSUMPTION OF LPG IN WEST AFRICA (1989)
COUNTRY POPULATION CONSUMPTION CONSUMPTION
‘000 kg PERCAPITAin
kg
GABON 1,100,000 10,355 9.4
SENEGAL 7,000,000 29,500 4.2
CONGO 1,990,000 1,103 2.2
CAMEROUN 11,000,000 23,035 2.1
COTE d’IVOIRE 11,200,000 22,844 2.0
NIGERIA 110,000,000 108,000 1.0
GHANA 13,900,000 6,387 0.5
TOGO 3,400,000 727 0.2
BURKINA FASO 8,500,000 1,641 0.2
MALI 7,900,000 788 0.1
source: PETROTECH
CONSUMPTION OF LPG IN WEST AFRICA (1989)
CONSUMPTION ('000KG)
120000
100000
80000
60000
40000
20000
0
COUNTRY
Source: PETROTECH
THE GHANA LPG
PROMOTION
• The promotion started in 1990
• Short term aim – to eliminate flaring of
LPG at TOR
• Long term aim - ensure households that
use charcoal and firewood for cooking
adopt use of LPG.
SOME SPECIFIC ISSUES
(DIFFICULTIES ENCOUNTERED)
• Number of cylinders in circulation
• Non-uniformity in standards among OMCs
(Mobil, Shell and Goil)
• Insufficient re-filling points
• Traditional mode of cooking vrs Western
style cooking stoves
• Resistance to change
LPG PRICE BUILD UP (MID ‘90s)
COST DESCRIPTION Cedis/kg US$/kg
1. Ex- refinery price 607.92 0.26
2. Filling plant expenses 53.86 0.02
3. Promotional levy 61.18 0.03
sub total 722.96 0.31
4. Dealers margin 24.38 0.01
5. Marketers margin 33.80 0.02
6. Transporters margin 47.27 0.02
Ex-Pump Price 823.40 0.36
Home delivery service charge
5 kg cylinder 80.00/kg 0.04/kg
14.5 kg cylinder 75.86/kg 0.03/kg
S ource: MINISTRY OF ENERGY
SOME OF THE PROMOTIONAL
STRATEGIES
? LPG Promotion Unit set up within the Ministry
? Ministry was primary investor and fixes the prices of LPG.
? Promotional levy used for creating required awareness and
demand for the increased use of LPG.
? Door to door LPG delivery – Service Providers charge
additional fee for delivery gas to individual residences.
? Cylinders given out to households at amortized price and part
of cost was recouped when gas was purchased.
? Government institutions eg. Hospitals, boarding schools etc
were encouraged to convert their kitchen to LPG burners.
? Commercial cooked food sellers were given assistance.
SOME OUTPUTS FROM
THE PROGRAMME
• Increase in cylinders in circulation from
80,000 in 1989 to 600,000 in 1997.
• Overall LPG consumption increased
from 5,267 MT in 1989 to 32,000MT in
1996.
• Two (2) LPG cylinder Manufacturing Plants
are operational in Ghana with total production
capacity in excess of 135,000pieces of a
combination of 5kg and 14.5 kg cylinders.
• The private sector has established many LPG
distribution outlets for both cars and domestic
cylinders.
• Elements of traditional cook stoves have been
used as basis for the design of locally
manufactured LPG stoves.
REGIONAL PER CAPITA CONSUMPTION OF
LPG IN GHANA IN kg (1990 – 1994)
REGION 1990 1991 1992 1993 1994
(NATIONAL) (0.43) (0.67) (0.92) (1.30) (1.60)
GREATER 2.90 4.24 5.93 8.06 10.59
ACCRA
ASHANTI 0.28 0.46 0.58 0.80 0.71
WESTERN 0.17 0.26 0.34 0.62 0.62
CENTRAL 0.14 0.25 0.33 0.56 0.46
EASTERN 0.06 0.15 0.21 0.37 0.45
VOLTA 0.03 0.08 0.11 0.29 0.43
NORTHERN 0.06 0.08 0.13 0.20 0.20
UPPER 0.02 0.08 0.07 0.10 0.15
EAST
BRONG 0.03 0.06 0.11 0.11 0.11
AHAFO
UPPER 0.00 0.02 0.06 0.04 0.05
WEST
Source: GNPC
REGIONAL PER CAPITA CONSUMPTION OF OF LPG GAS (KG)
12
National
10 Greater Accra
Ashanti
8 Western
Central
6
Eastern
4 Volta
Northern
2
Upper East
0 Brong Ahafo
1990
1991
1992
1993
1994
Upper West
Source: GNPC
PROJECTED REGIONAL LPG DEMAND
(2002- 2004)
REGION 2002 (‘000kg) 2003 (‘000kg) 2004 (‘000kg)
(NATIONAL) (69,208) (73,423) (77,454)
GREATER 44,539 45,842 47,013
ACCRA
ASHANTI 7,549 8,282 8,959
WESTERN 3,624 3,976 4,301
CENTRAL 2,646 2,903 3,140
EASTERN 3,824 4,196 4,196
VOLTA 3,643 4,264 4,927
NORTHERN 1,673 1,959 2,263
UPPER EAST 466 545 630
BRONG AHAFO 956 1,119 1,294
UPPER WEST 289 335 391
Source: PETROTECH
? LPG is the fuel of choice in the urban areas !
PROJECTED REGIONAL LPG DEMAND (‘000KG)
80000
National
70000 Greater Accra
60000 Ashanti
50000 Western
Central
40000
Eastern
30000
Volta
20000 Northern
10000 Upper East
0 Brong Ahafo
2002
2003
2004
Upper West
LPG is the choice of fuel in the
Urban areas
Source: PETROTECH
PRICE BIULD-UP FOR LPG (SINCE DEC. 2001)
COST BREAKDOWN BUILD UP (cedis) US$
1. Ex-pump price 1,217.39 0.15
2. Excise duty @ 15% 182.61 0.02
3. Excise duty specific 100.00 0.01
4. Filling plant expenses 321.20 0.03
sub total 1,731.20 0.21
5. Dealer’s margin 109.70 0.01
6. Marketer’s margin 136.03 0.02
7. Transporter’s margin 193.07 0.02
8.Distribution 30.00 0.01
compensation margin
EX-PUMP PRICE 2,200.00 0.27
Home delivery Service
charge
5 kg bottle 500.00 (max) per bottle 0.06
14.5 kg bottle 1,400.00 (max) per bottle 0.17
Source: MINISTRY OF ENERGY
FUEL COST VERSUS % HOUSEHOLD USAGE
TYPE OF FUEL FUEL COST FUEL COST % OF
(cedis/kwh) (US$/kwh) HOUSEHOLD
USE
FIREWOOD 42 0.005 62.5%
CHARCOAL 115 0.014 30.6%
LPG 182 0.022 4.1%
KEROSINE 209 0.025 1.1%
ELECTRICITY 400 0.048 0.4%
CROP RESIDUE 0 - 20 0 – 0.002 1.3%
*source: W. A. TOGOBO/MINISTRY OF ENERGY
NOTE: THE MOST EXPENSIVE FUEL IS THE LEAST USED BY
HOUSEHOLDS
COMPARATIVE COST OF COOKING
FUEL (SEPT. 2002)
FUEL DESCRIPTION CEDIS US$
LPG 14.5 kg bottle 32,500 3.96
KEROSINE 1 Gallon 8,800 1.07
FIREWOOD 1 bundle of 9kg 1,500 0.18
(Accra)
ELECTRICITY 100 units (50-300 40,000 4.88
tariff category)
ELECTRICITY 100 units (above 98,000 11.95
300 tariff category)
CHARCOAL 1 bag of 46 kg 45,000 5.49
(Accra)
Source: W. A. TOGOBO/MIN. OF ENERGY
According to the Ghana Living Standards
Survey (GLSS) of 2000:
• 22.7% of the population in Accra use
LPG
• 5.2% of the population in other urban
areas use LPG
• 0.6% of the population in the rural areas
use LPG
RESOLVING ISSUE OF FUTURE
SUPPLIES
• TOR built in 1963 with capacity of 28,000
bpsd
• Expansion and modernisation work
carried out in two phases
• Phase 1 – revamping and expansion to
process 45,000bpsd
• Phase 11 – installation of secondary
conversion plant (RFCC)
FUTURE SUPPLIES CONT’D
• When RFCC becomes operational, there
will be excess LPG for export as TORs
capacity will be increased from 27,713MT
to about 166,873MT
• (source: Samsung Revamping
Studies/Foster Wheeler USA Corporation
Report)
LESSONS
? LPG is mainly used by medium to high income
households
? Majority of the poor use the cheapest fuel despite the
inconveniences
? Price of fuel is a major determining factor for fuel choice
for the majority (the poor)
? Out of about 18.5 million Ghanaians, over 16.8 million
have their meals cooked from wood fuel (firewood and
charcoal)
RECENT MONITORING OF
LPG OPERATIONS
• Done by the Energy Commission
• Monitor / enforce compliance with
regulations
• Ascertain Best Operating Procedures
(BOPs) and Job Safe Practices (JSPs) in
supply, storage and marketing of LPG.
SHORT COMINGS IDENTIFIED
• OMCs have different sets of rules
• Deficiencies in LPG appliances (eg cylinder
accessories), handling of appliances lack of
training for personnel
• No National regulations, codes of practice and
guidelines for Good Safety Practices in the
LPG industry yet
• High cost
STEPS BEING TAKEN
• On-going consultations towards the
development of a National LPG code of
Practice and Guidelines for Good Safety
Practices.
• The final product is expected to be
guidelines not only for safe handling and
transportation of LPG cylinders but also
the following:
a Bulk LPG storage facilities at
commercial/industrial premises
b. Handling and storage of LPG cylinders and
accessories of commercial installations
c. Handling and storage of LPG cylinders and
accessories at domestic installations
d. Domestic/commercial/industrial cylinders
e. LPG retail outlets and filling plants
f. Low pressure regulators
g. Mobile LPG filling plants
THANK YOU FOR
YOUR ATTENTION
