NPA boss urges government to invest in gas infrastructure
Posted on: 2011-Aug-26        Joy fm
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The Chief Executive Officer of the National Petroleum Authority [NPA], Alex Mould says it is imperative that government invests in gas infrastructure since the private sector will not do that until they are certain that it is prudent to do so.

Speaking on Multi TV’s current affairs programme, pm: EXPRESS, Mr. Mould explained that the private sector is not buying into the gas business because of the government subsidy on the product.

He said “the demand will reduce and what will happen is you will have invested in infrastructure based on a certain demand projection and now by a signature of a government, you would have removed the demand, and you will be left holding the bag. So financial institutions would be very reluctant to invest unless they can get some sort of guarantee and comfort from the government and future governments that this will not happen”.

Mr. Mould said the limited storage facility at the Tema Oil Refinery [TOR] is hampering the import of more LPG into the country even though demand for the product is on the increase adding that the current storage facility at TOR when filled can only supply gas to the country for a week.

The NPA boss explained that consumption of gas has also increased exponentially over the last 12 years. According to him, whereas a decade ago, the country’s LPG consumption was only 150 metric tons a day, the consumption level has risen to 900 metric tons a day, twice the rate of consumption in 2008 which was 450 metric tons a day.

Mr. Mould said the story will however be very different if about 1300 to 1500 metric tons of LPG is supplied daily.

He demystified the assertion that the use of gas particularly by commercial vehicle drivers solely accounts for the intermittent shortage of the commodity on the market. He however admitted that the rate at which vehicles are converted to be fueled by gas has increased alongside the consumption of the product.

He explained that vehicle owners have had to resort to the use of gas because oil prices have increased since 2008. “In December 2008, oil prices were 40 dollars, we increased prices in October 2009, when oil price moved to 75 dollars, now when we increased fuel prices, we kept LPG relatively low, then we increased prices again in 2011 January, and we also did not move the LPG price. So petrol has seen two increases whereas LPG has remained stable. So we can’t blame the taxi drivers because it makes economic sense... but they are a cause also for our current problem”.

According to him, at the real price, LPG is not a preferred fuel to petrol because in terms of consumption, petrol is cheaper than LPG.

The NPA Boss said when the subsidy program was started in the 1980’s, the infrastructure was adequate but “we changed the way we receive crude oil and Petroleum products by building a facility about five kilometers in the Sea”.

He stated that it was not enough that TOR has only one pipeline that can receive LPG. “Once we started importing LPG in large quantities, we should have looked at increasing the pipeline and other infrastructure”, he noted.