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Wednesday(February,25 2015)

NPA PAYS ARREARS TO BDCs

 

The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude  oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.

“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

- See more at: http://graphic.com.gh/news/general-news/39177-npa-pays-arrears-to-bdcs.html#sthash.BOhznHKr.dpuf

The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude  oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.

“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

- See more at: http://graphic.com.gh/news/general-news/39177-npa-pays-arrears-to-bdcs.html#sthash.BOhznHKr.dpufThe Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companie
The Chief Executive Officer of the National Petroleum Authority (NPA), Mr Moses Asaga, has said that the authority has settled the GH¢412 million debt it owed the Bulk Oil Distribution Companies (BDCs).

The settlement followed money the authority got from over-recoveries when the prices of petroleum products dropped on the world market.

In an interview with the Daily Graphic, Mr Asaga said with the drop in the price of crude oil on the world market, the NPA had successfully paid off its indebtedness of GH¢412 million to the BDCs through over-recoveries.

He explained that the over-recoveries became possible through the decision of the authority to implement a balancing act that saw a cumulative reduction in the prices of petroleum products by 12 per cent which was lower than what Ghanaians had expected.

Decision not to reduce prices unpleasant but..

Unpleasant as the decision may have been for Ghanaians, he said, the amount owed the BDCs which was as a result of under-recoveries arising from the government subsidising the prices of petroleum products in the past posed a threat to the financial health of the BDCs.

That, he said, was because the debt had created a financial crunch for the BDCs who had to rely on banks for support adding that with their indebtedness to the banks, there was no way the banks would have given them any additional funds to import crude.

If that had happened, he said, it would have led to shortages in the supply of petroleum products and so to ensure a regular supply, the authority had to use part of the windfall to pay the BDCs.

The NPA’s indebtedness to the BDCs as of July 2014, he said, stood at GH¢412,005,982 adding that payments of the amount began from August 2014.

“As of January 31, 2015, all outstanding debts owed the BDCs had been cleared,” Mr Asaga told the Daily Graphic.

Hedge policy to protect Ghanaian consumers

He announced that the NPA would from Sunday, March 1, 2015, implement a hedge policy for petroleum products as a move to insulate Ghanaians from having to pay more in the event that world prices of those products escalated.

The price of crude oil at the world market fell to a record low of $ 46 but in recent weeks, the price has inched up to about 64 dollars thereby raising fears that it might climb higher.

A hedge is like an insurance policy that insulates consumers from paying prevailing prices when prices move from a previous low rate to a higher one.

The downside to the hedging policy is that, in the event that prices fall lower, the country will not enjoy any windfall.

Mr Asaga explained that with the price of crude oil moving from $46 to $60, the over-recoveries that came to the authority reduced by a third from GH¢65 million to GH¢24 million.

The government, he said, was putting in place a mitigating account into which the over-recoveries, following the settlement of the indebtedness to the BDCs, would be paid.

“Accruals in that account would then be used to cushion consumers in the event of prices going up,” he said.
“But with prices rebounding, we cannot do that again and have to resort to other means,” he said.

The hedging, he said, would safeguard consumers from price volatility on the world market adding that the NPA was hoping that prices would go up to $70 per barrel and that any increase beyond that had to be hedged.

He explained that with the hedge policy, even if prices of petroleum products should cross the $70 mark, Ghanaians would not experience any further change in the ex-pump price.

Source: Daily Graphic
Tuesday(February,24 2015)

OIL MARKET NEWS (WEEK 7): WEEK ENDED FEBRUARY 20, 2015

 Major Highlights
  • Weekly average Brent crude oil price rises for the fifth consecutive week.
  • The weekly average GHS/USD rate depreciates by 1.21% when compared to the previous week.
  • First vessel picks up oil from Libyan port of Hariga for exports.
  • Ghana’s current stock of diesel decreases; petrol increases when compared to the previous week.
  • Total U.S commercial petroleum inventories decreased by 0.8 million barrels last week.
  • Japan’s crude oil imports fell by 7.2% in January 2015.
  • Saudi Arabia’s oil production rises to about 10.0 mb/d – PIRA.
Average Dated Brent price for the week (published by Platts) increased by $3.64 to $60.32 per barrel from the previous week's average of $56.69 a barrel, indicating 6.42% increase.

Weekly average Brent crude oil price increased for the fifth consecutive week, to its 2015 high, supported by threats to Middle East supplies and expectations lower prices may prompt a slowdown in U.S. output.

"The oil price is finding additional support from renewed greater perception of the risks to supply," said Carsten Fritsch, analyst at Commerzbank. "In the short term, the momentum suggests that prices will climb further."

In the course of the week, Brent crude oil price rise was capped after another big weekly build in U.S. crude inventories and a possible rise in Saudi output stoked worries about oversupply. "The inventories were the trigger for the sharp correction lower," Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt, said. "The focus is again back on the oversupply - the big question is for how long?"

Free on board (FOB) prices of petrol increased by $8.20 to $571.65/MT from the previous week's average of $563.45, indicating 1.46% increase; diesel increased by $10.75 to $565.40/MT from the previous week’s average of $554.65, indicating 1.94% increase; and LPG increased by $24.70 to $460.75/MT from the previous week’s average of $436.20, indicating 5.66% increase, during the period under review.

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased the contribution of the exchange rate in the Price Build-Up. The GHS/US Dollar exchange rate for the period 16th February 2015 to 20th February 2015 was 3.4027 compared to 3.3619 during the previous week (1.21% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 2.69%, 3.18% and 6.94% respectively, during the same period under review.

Geopolitics

A tanker has loaded 600,000 barrels of crude from storage at the Libyan port of Hariga, an energy official said on Wednesday, the first vessel to pick up oil for export from the country in more than a week.

The official said crude supplies from the Sarir oilfield, which flow to Hariga for export, remained disrupted following a pipeline blast, with repairs and maintenance expected to take a number of days.

In another development, a top economist at the International Energy Agency (IEA) said the rise of the Islamic State (IS) in Iraq and Syria presents a major challenge for the investment necessary to prevent an oil shortage in the next decade.

While the IEA has sounded warnings that Middle East crude production will need to rise in the 2020s to meet predicted demand, Chief Economist Fatih Birol said there remain "myopic" views about the need for investment at a time when the fall in oil prices means energy companies are slashing new drilling.

Inventories

Ghana’s current stock of Diesel and Petrol to last 2.7 and 4.3 weeks respectively (as at February 23, 2015). Diesel’s stock of 2.7 weeks compare unfavorably to last week’s stock to last of 3.2 weeks, while Petrol’s stock of 4.3 weeks compare favorably to last week’s stock to last of 2.3 weeks.

According to the import schedule, diesel of about 23.7 million litres is expected for delivery, while Petrol of about 13.4 million litres is expected for delivery to add to existing stockpiles for the market. LPG of about 5.0 million kilogrammes is also expected for delivery by close of the week (February 28, 2015).

The CDU and RFCC unit was shut down on 3/2/15 and 20/1/15 respectively. The CDU was shut down due to lack of crude and the RFCC suspended operations due to planned mini-maintenance.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for week ended February 13, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.7 million barrels to 425.7 million barrels.

Gasoline stockpiles increased by 0.5 million barrels to 245.9 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.8 million barrels to 208.0 million barrels over the same period. Total commercial petroleum inventories decreased by 0.8 million barrels last week.

Demand and Supply

The EIA in its Weekly Petroleum Status report for week ended February 13, 2015 reported that, U.S. crude oil imports averaged 7.1 million barrels per day last week, down by 181,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged 7.3 million barrels per day, 3.6% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 635,000 barrels per day. Distillate fuel imports averaged 216,000 barrels per day last week.

Japan's customs-cleared crude oil imports fell 7.2 percent in January from the same month a year earlier, the Ministry of Finance said on Thursday.

Japan, the world's fourth-biggest crude buyer, imported 3.55 million barrels per day (17.52 million kilolitres) of crude oil last month, the preliminary data showed. Japan's imports of liquefied natural gas totalled 8.43 million tonnes last month, up 3.1 percent from a year earlier. Imports of thermal coal for power generation increased by 10.2 percent in January to 11.19 million tonnes, the data showed.

Production from Saudi Arabia is rising, and demand has pushed it up to about 10 million barrels per day (bpd), according to energy consultancy PIRA.

The estimate suggested the country is hewing tightly to the strategy of protecting market share rather than cutting production to try to inflate prices. Saudi production averaged about 9.7 million bpd since last June, according to the consultancy.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Tuesday(February,17 2015)

HEDGING OF PETROLEUM PRODUCTS TO BEGIN IN MARCH, 2015

Overview

In the last couple of months, there has been on-going discussions on prices of crude oil on the international market and the impact it has on prices of petroleum product in Ghana. More specifically, recent lowering prices of crude oil and petroleum products on the world market has yielded calls from sections of the public for lower prices of fuel for domestic consumers.

The response from the National Petroleum Authority (NPA) to these calls has been consistent with the rationale that the part of the windfall from low price of crude oil should be applied to settling debts of GHC412milion owed local Bulk Oil Distribution Companies (BDCs) incurred as a result of accrued under-recoveries as at July 2104.

Background of under-recoveries/debt owed BDCs

The mention of under-recoveries or debt owed BDCs leads me naturally to explain the background of this debt of GHC412 million owed the BDCs.

In the periods between 2013 and July 2014, Government through its social programme had intervened in the full-pass-through policy of National Petroleum Authority in order to keep prices from going up.

But for this social intervention, fuel prices would have been increased more often between 2013 and 2014 than it had been. This intervention of keeping prices at the pump lower than what they ought to be (under-recovery) led to the accumulation of under-recovery of GHC412million.

This amount was owed to BDCs who imported refined petroleum products into the country at various period between 2013 and July 2014.

This debt (under-recovery) had to be paid in order to guarantee regular supply of fuel to keep the economy moving. Which is why the NPA maintained that the windfall from lowering prices on the world market is applied to settling the indebtedness.

Cumulative 12% Reduction in Fuel Prices

It would be recalled that the whiles NPA continued to use the windfall from crude oil prices to pay off a debt of GHC412MILLION under-recoveries owed BDCs, there was the need to give some of the windfall to the consumer.

The NPA subsequently announced a 2% reduction in the price of fuel to be followed by another reduction of 10% bringing the total reduction to 12% with a commitment to paying the debt owed the BDCs.

Based on the reduced price, NPA has projected to complete payment of the debt of GHC412 million owed the BDCs by end of February 2015., I am indeed pleased to announce that the mission is accomplished.
 
Price of Crude Oil on the world market begun to fall

Crude Oil price on the world market fell from USD106 per barrel in July 2014 to about USD46 per barrel in December 2014 representing a decrease of 59% yielding a windfall of GHC415million.

As I mention earlier, from this amount, GHC412million has been used to settle the debt (under-recoveries) owed the BDCs.

Since January 28th 2015, crude oil price has begun to rebound.  From USD46 to near USD60 per barrel representing an increase of 12%.  The NPA projects that trend will be sustained for some months.

Additionally, the GHC/USD exchange rate monitored from the Central Bank had also shown depreciation of about 3% since February 1, 2015.

The Way forward

As has been observed by the NPA, crude oil prices have begun a steady appreciation. The impact of the volatility in the prices of products and the forex rate poses a significant challenge to keeping prices low.

There is therefore the need for alternatives to the policy of full-pass-through. We are considering the proposal of implementing a hedge policy by March 1st 2015.

We estimate a strike price of USD700 and USD750 for diesel and petrol respectively for an estimated annual consumption of 2.8million Metric tons of products will translate into a hedge premium cost of 8.6miilion.
Wednesday(February,11 2015)

REJOINDER - DANGER: WRONG FUEL FOR YOUR VEHICLE

The attention of the National Petroleum Authority (NPA) has been drawn to an article entitled, “Danger: wrong fuel for your vehicle,” which was published on the front page of the Tuesday, February 10, 2015 edition of the Finder newspaper.

The story contained some factual inaccuracies which we seek to clarify.

In the said publication, which was discussed on several media platforms, claimed amongst other things  that, many Ghanaians were spending so much money on the repair of their vehicles because such cars were not designed to use the kind of fuel sold in the country.

The story went on to say that Ghana lacks standards on the types of vehicles that can be imported into the country in consonance with the type of fuel sold in Ghana.

Clearly, the story has nothing to do with the quality of fuel offered for sale in the country as the headline sought to suggest.

But the writer then switched to say that the Ghana Automobile Distributors Association (GADA) was, therefore, calling on government to, as a matter of urgency, promulgate a legislation that clearly stipulates fuel standards for vehicles in Ghana.

The NPA wishes to state in unequivocal terms that Ghana has specifications for all petroleum products sold in the country.

We are aware that there are different types of vehicles that come into the country and most of these new vehicles which are manufactured in Europe and America use petrol with minimum Research Octane Number (RON) of 95.

Currently in Ghana, the minimum RON for motor vehicles is RON 91 per Ghana Standard Authority specifications due to the fact that our refinery produces that minimum grade.

On the Ghanaian market currently, there are fuels ranging from minimum RON of 91 to 95 which implies that all vehicle types are able to fit into this boundary. Even most of the newest and advanced cars that use petrol with RON above 95 are able to use the fuel on our market because such fuels have octane boosters added to boost the octane levels up to about RON 98.

If the The Finder newspaper had first cross checked these claims with the National Petroleum Authority prior to publication as the ethics and practice of journalism enjoin, we would have corrected these misleading information.

We hereby deny these allegations in the said story and reemphasize that fuel sold on the Ghanaian market is of the finest quality.

As a Regulator of the downstream petroleum industry, we are aware of the importance of providing quality petroleum products to the market which is why we introduced innovative strategies such as the Petroleum Product Marking Scheme (PPMS) and quality monitoring programmes aimed ensuring that the quality standard of fuel sold at final dispensing outlets are maintained to the right specifications and quality. The PPMS programme by the NPA uses cutting edge technology and ultra-modern laboratory, the only one of its kind in West Africa. The programme also undertakes round the clock inspections of fuel stations across the country to guarantee the integrity of fuel sold on the market.

In this regard, the NPA wishes to assure the general public that fuels (petrol and diesel) sold in the country are safe and fit for all types of vehicles imported into the country and we will continue to ensure that only quality fuels are sold on the market.
 
ISSUED BY THE NATIONAL PETROLEUM AUTHORITY
Tuesday(February,10 2015)

DANGER: WRONG FUEL FOR YOUR VEHICLE

It has emerged that several Ghanaians, including government, spend so much money on the repair of their vehicles because such cars are not designed to use the kind of fuel sold in Ghana.

This is happening because Ghana lacks standards on the type of vehicles that can be imported into the country in consonance with the type of fuel sold in the country.

Some of the affected vehicles in Ghana include Ford F 350 and Toyota Tundra, which is mostly used by the Ghana Police Service.

The Ghana Automobile Distributors Association (GADA) is, therefore, calling on government to, as a matter of urgency, promulgate a legislation that clearly stipulates fuel standards for vehicles in Ghana.

This, the association said, is critical to saving unsuspecting Ghanaians and government from buying vehicles and running them on the wrong fuel and spending so much money on frequent repairs.

Speaking to The Finder, Mr Kojo Annobil, Vice-President of GADA, said such a legislation would save the country millions of cedis in repair cost while prolonging the lifespan of vehicles.

He explained that the Research Octane Number (RON) of petrol sold in Ghana ranges between 91 and 94 while the only type of diesel sold in Ghana has higher sulphur content.

According to him, the proposed legislation should restrict the importation of vehicles, as only cars designed to use the above-mentioned fuel should be imported into the country.

Mr Annobil stated that car manufacturers only give cars designed to use the fuel in Ghana to accredited vehicle distributors, thus preventing them from importing vehicles that use other fuel not found in Ghana.

However, he said non-accredited dealers import all kinds of vehicles which use higher grade of fuel not found in Ghana.

He noted that spare parts of such vehicles are also not sold in Ghana and, therefore, owners have to order for ineffective parts from abroad.

Mr Annobil said the legislation would ensure that vehicle standards conform to the fuel available in Ghana.

The GADA Vice-President stated that the performance of a vehicle and its lifespan are directly linked to the performance of the fuel it uses.
Tuesday(February,03 2015)

OIL MARKET NEWS (WEEK 4): WEEK ENDED JANUARY 30, 2015

  Major Highlights
  • Brent crude oil trades in a range of $46-$48 per barrel
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • Libya returns fuel tanker to rival government
  • Ghana’s current stock of diesel increases; petrol decreases when compared to the previous week
  • Total U.S commercial petroleum inventories increased by 2.0 million barrels last week
  • China’s oil demand to grow 3 percent in 2015
  • Ghana’s consumption of petroleum products except MGO Foreign declines in Nov 2014 (MoM).
Average Dated Brent price for the week (published by Platts) increased marginally by $0.28 to $47.14 per barrel from the previous week's average of $46.87 a barrel, indicating 0.59% rise. Brent crude oil price increased marginally for the second consecutive week as a weak dollar propped up commodities, which are priced in US dollar.

The dollar stepped back from an 11-year peak against a basket of currencies after soft spending data and some disappointing earnings cast doubts about the underlying optimism on the U.S. economic outlook.

"The key driver for oil prices in the last few days has been currency fluctuations ... we had seen some weakness in the U.S. dollar which helped support prices overnight," Ric Spooner, chief analyst at CMC Markets in Sydney, said.

Also supporting prices were comments by OPEC's secretary-general that oil prices at current levels may have reached a floor and could move higher very soon, his first public comment that oil's second-biggest decline on record may have run its course.

Abdulla al-Badri also warned of a risk of a future price spike to $200 a barrel if investment in new supply capacity is too low.

Free on board (FOB) prices of petrol decreased by $3.90 to $472.05/MT from the previous week's average of $475.95, indicating 0.82% decline; diesel increased by $3.60 to $467.20/MT from the previous week’s average of $463.60, indicating 0.78% rise; and LPG increased by $17.80 to $324.40/MT from the previous week’s average of $306.60, indicating 5.81% rise, during the period under review.

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 26th January 2015 to 30th January 2015 was 3.2368 compared to 3.2271 during the previous week (0.30% depreciation).

The GHS equivalent of FOB prices for petrol decreased by 0.52%, while diesel and LPG increased by 1.08% and 6.12% respectively, during the same period under review.

Geopolitics

Libya's recognized government has released a tanker forced to dock at a port under its control after originally banning it from delivering fuel to its rival administration, a port official said. War planes forced the tanker Anwaar Afriqya to sail to Tobruk after it had originally approached the port of Misrata, the air force commander for the recognized Prime Minister Abdullah al-Thinni said.

This could be seen as a sign by Libya’s recognized government to extend a hand of friendship to its rival government in an attempt at brokering peace between the two feuding factions.

Inventories

Ghana’s stock of Diesel and Petrol to last 4.0 and 3.0 weeks respectively (as at February 2, 2015). Diesel’s stock of 4.0 weeks compare favorably to last week’s stock to last of 3.4 weeks, while Petrol’s stock of 3.0 weeks compare unfavorably to last week’s stock to last of 3.6 weeks.

According to the import schedule, diesel of about 70.4 million litres was expected for delivery, while Petrol of about 49.7 million litres was expected for delivery to add to existing stockpiles for the market.

LPG of about 5.0 million kilogrammes was also expected for delivery by close of the week (February 7, 2015). The CDU unit at TOR resumed production on 29/12/2014 and is currently producing at a rate of 3,718MTPSD (70%). The RFCC unit was shutdown due to planned mini-maintenance on 20/01/2015.

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for January 23, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.9 million barrels to 406.8 million barrels.

Last week's surge in U.S. crude oil stocks left them at the highest level for this time of year in at least the last 80 years, according to the EIA. Gasoline stockpiles decreased by 2.6 million barrels to 241.1 million barrels.

Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.9 million barrels to 213.3 million barrels over the same period. Total commercial petroleum inventories increased by 2.0 million barrels last week.

Demand and Supply

China's implied oil demand will grow 3 percent this year (2015) versus last year, the country's top energy group forecast, little changed from the pace of growth in 2014 as calculated by Reuters. State-owned China National Petroleum Corporation (CNPC) saw the nation's oil demand rising to 10.68 million barrels per day (bpd) in 2015, some 310,000 bpd higher than last year.

References
  •  www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Wednesday(January,28 2015)

OIL MARKET NEWS (WEEK 3): WEEK ENDED JANUARY 23, 2015

Major Highlights
  • Brent crude oil trades in a narrow range of $46-$47 per barrel
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • New fighting breaks out near biggest Libyan oil port
  • Ghana’s current stock of diesel increases; petrol unchanged when compared to the previous week
  • U.S crude stockpiles surge with largest build in 14 years
  • Total U.S commercial petroleum inventories increased by 2.4 million barrels last week.

Brent crude oil trades in a narrow range of $46-$47 per barrel

Average Dated Brent price for the week (published by Platts) increased marginally by $0.34 to $46.87 per barrel from the previous week's average of $46.53 a barrel, indicating 0.73% rise.

Oil prices jumped as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets already facing some of the biggest shifts in decades.

"The fear of the unknown is going to be supportive to crude oil prices," said John Kilduff, partner, Again Capital LLC in New York. "King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting," he added.

Gains were however capped, as Saudi Arabia's new King Salman moved to assuage fears of an unstable transition and any policy change in the world's largest oil exporter.

"Oil markets will take comfort from the speed and stability of the succession process, and the announced pledge for continuity of policy," said Majid Jafar, chief executive of Crescent Petroleum, a UAE-headquartered oil and gas producer focussed on the Middle East.

Free on board (FOB) prices of petrol increased by $13.00 to $475.95/MT from the previous week's average of $462.95, indicating 2.81% rise; diesel increased by $6.85 to $463.60/MT from the previous week’s average of $456.75, indicating 1.50% rise; and LPG increased by $25.10 to $306.60/MT from the previous week’s average of $281.50, indicating 8.92% rise, during the period under review.

The weekly average GHS/USD exchange rate depreciates when compared to the previous week

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 19th January 2015 to 23rd January 2015 was 3.2271 compared to 3.2190 during the previous week (0.25% depreciation).

The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 3.07%, 1.76% and 9.19% respectively, during the same period under review.

Geopolitics

New fighting breaks out near biggest Libyan oil port

Libyan armed factions accused each other of launching new attacks near the country's largest oil port, Es Sider. Two opposing governments - the internationally recognized authorities in the east and rivals who have seized the capital, Tripoli - are fighting for control of the country.

Troops loyal to the Tripoli government opened an offensive last month to try to take Es Sider and Ras Lanuf oil ports, which have had to shut down operations. Both sides declared partial ceasefires in the past few days to give a U.N.-sponsored dialogue a chance after a month of clashes.

Inventories

Ghana’s current stock of diesel increases; petrol unchanged when compared to the previous week

Ghana’s stock of Diesel and Petrol to last 3.4 and 3.6 weeks respectively (as at January 26, 2015). Diesel’s stock of 3.4 weeks compare favorably to last week’s stock to last of 3.3 weeks, while Petrol’s stock of 3.6 weeks remained unchanged when compared to last week’s stock to last of 3.6 weeks.

According to the import schedule, diesel of about 102.5 million litres was expected for delivery, while Petrol of about 40.3 million litres was expected for delivery to add to existing stockpiles for the market. LPG of about 2.5 million kilogrammes was also expected for delivery by close of the week (January 31, 2015). The CDU unit at TOR resumed production on 29/12/2014 and is currently producing at a rate of 3,936MTPSD (74%). The RFCC unit was shutdown due to planned mini-maintenance on 20/01/2015.

Total U.S commercial petroleum inventories increased by 2.4 million barrels last week

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for January 16, 2015 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.1 million barrels to 397.9 million barrels. U.S. crude oil inventories had their largest weekly build since 2001, surpassing expectations as refineries reduced production.

Last week's surge in U.S. crude oil stocks left them at the highest level for this time of year in at least the last 80 years, according to the EIA. Gasoline stockpiles increased by 0.6 million barrels to 243.7 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 3.3 million barrels to 217.2 million barrels over the same period. Total commercial petroleum inventories increased by 2.4 million barrels last week.

Demand and Supply

Total U.S commercial petroleum inventories increased by 2.4 million barrels last week

The EIA in its Weekly Petroleum Status report for January 16, 2015 reported that, U.S. crude oil imports averaged over 7.2 million barrels per day last week, down by 274,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.2 million barrels per day, 4.2% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 683,000 barrels per day. Distillate fuel imports averaged 268,000 barrels per day last week.

Total products supplied over the last four-week period averaged 19.7 million barrels per day, up by 4.9% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.0 million barrels per day, up by 8.7% from the same period last year.

Distillate fuel product supplied averaged 3.9 million barrels per day over the last four weeks, up by 12.5% from the same period last year. Jet fuel product supplied is up 7.6% compared to the same four-week period last year.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Friday(January,02 2015)

OIL MARKET NEWS (WEEK 53): WEEK ENDED JANUARY 2, 2015

  Major Highlights
  • Brent crude oil trades below $60 per barrel on supply glut
  • The weekly average GHS/USD exchange rate depreciates when compared to the previous week
  • Libya makes progress after fire at oil port destroys up to 1.8 million barrels of crude
  • Ghana’s stock of diesel decreases while petrol increases when compared to the previous week
  • Total U.S commercial petroleum inventories increased by 2.8 million barrels last week.
  • Russia oil output hits post-Soviet high.
  • Iraq’s December oil exports hit 2.940 million bpd, highest since 1980

Brent crude oil trades below $60 per barrel on supply glut

Average Dated Brent price for the week (published by Platts) decreased by $2.83 to $55.87 per barrel from the previous week's average of $58.70 a barrel, indicating 4.82% decline

Brent crude oil price dropped as worries about a surplus of global supplies and lacklustre demand dragged on oil markets. Global supply glut outweighed concerns of lost supply from Libya where battling militias have closed ports.

Russia's oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day (bpd), up 0.7 percent thanks to small non-state producers, Energy Ministry data showed, adding to an already oversupplied oil market. "Nothing has changed on the supply side.

Unless there are some supply cuts, oil markets can't be strong at the moment," said Ken Hasegawa, commodity sales manager at Tokyo's Newedge Japan.

Free on board (FOB) prices of petrol decreased by $18.71 to $518.13/MT from the previous week's average of $536.83, indicating 3.48% decline; diesel decreased by $26.56 to $520.69/MT from the previous week’s average of $547.25, indicating 4.85% decline; and LPG decreased by $29.83 to $358.00/MT from the previous week’s average of $387.83, indicating 7.69% decline, during the period under review.

The weekly average GHS/USD exchange rate depreciates when compared to the previous week

The average GHS/US Dollar exchange rate depreciated when compared to the previous week. The depreciation of the Ghana Cedi against the USD, increased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 29th December 2014 to 2nd January 2015 was 3.2017 compared to 3.2000 during the previous week (0.05% depreciation). The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 3.43%, 4.80% and 7.64% respectively, during the same period under review.

Geopolitics

Libya makes progress after fire at oil port destroys up to 1.8 million barrels of crude

Libya has made more progress in extinguishing a fire at oil storage tanks at the country's biggest oil port, Es Sider that has been raging for one week, a member of a firefighting crew said.

The fire destroyed up to 1.8 million barrels of crude and damaged seven storage tanks, causing total damage of $213 million, a top oil official said.

Es Sider and its adjacent Ras Lanuf terminal have been closed since a group allied to a rival government in Tripoli moved three weeks ago to try and take them, part of a struggle between former rebels who helped topple Muammar Gaddafi in 2011 but are now fighting for power and a share of oil reserves.

Inventories

Ghana’s stock of diesel decreases while petrol increases when compared to the previous week

Ghana’s stock of Diesel and Petrol to last 3.8 and 3.5 weeks respectively (as at December 29, 2014). Diesel’s stock of 3.8 weeks compare unfavorably to last week’s stock to last of 4.8, while Petrol’s stock of 3.5 weeks compare favorably to last week’s stock of 1.9 weeks.

According to the import schedule, diesel of about 65.1 million litres was expected for delivery, while Petrol of about 119.5 million litres was expected for delivery to add to existing stockpiles for the market. LPG of about 7.0 million kilogrammes was also expected for delivery by close of the week (January 3, 2015). The CDU and RFCC remain shut down due to lack of feed and planned mini maintenance respectively.

Total U.S commercial petroleum inventories increased by 2.8 million barrels last week

The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for December 26, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.8 million barrels to 385.5 million barrels.

Gasoline stockpiles increased by 3.0 million barrels to 231.8 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, increased by 1.9 million barrels to 206.4 million barrels over the same period. Total commercial petroleum inventories increased by 2.8 million barrels last week.

Demand and Supply

Russia oil output hits post-Soviet high

Russia's 2014 oil output hit a post-Soviet record high average of 10.58 million barrels per day (bpd), rising by 0.7 percent helped by small non-state producers, Energy Ministry data showed. Oil and gas condensate production in December hit 10.67 million bpd, also a record high since the collapse of the Soviet Union.

The data showed Russia's so-called small producers, mostly privately held, increased their output by 11 percent to just over 1 million barrels per day.

Iraq’s December oil exports hit 2.940 million bpd, highest since 1980

Elsewhere, Iraq's oil exports hit a record high average of 2.940 million barrels per day (bpd) in December, their highest level since1980, an oil ministry spokesman said. Oil officials said exports from the country's southern terminals hit a record high 2.760 million bpd.

OPEC's oil supply fell by 270,000 barrels per day (bpd) in December to a six-month low as fighting cut Libyan output, offsetting record Iraqi southern exports and stable Saudi Arabian production, a Reuters survey found.

The survey indicates Libyan turmoil is effectively lowering output by the Organization of the Petroleum Exporting Countries, even after oil ministers decided at a meeting in Vienna last month against a formal reduction to defend market share.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Thursday(January,01 2015)

PRESS RELEASE: PRICES OF PETROLEUM PRODUCTS REDUCED EFFECTIVE JANUARY 1, 2015

Petroleum Prices have been reduced by 10% effective 1st January 2015. We therefore direct Oil Marketing Companies (OMCs) to effect this change at all retail outlets.

This decision takes a balance position of continuous effort to reduce outstanding under-recoveries and at the same time reflect falling prices of petroleum product on the world market.

SIGNED
Yaro Kasambata
Manager, PR & Consumer Services

Monday(December,01 2014)

OIL MARKET NEWS (WEEK 48) WEEK ENDED NOVEMBER 28, 2014

Major Highlights
  • Brent crude oil trades in a range of $71-$80 per barrel
  • The weekly average GHS/USD exchange rate appreciates compared to the previous week
  • Libya’s Tripoli-based government to take legal action against buyers bypassing the state
  • Ghana’s stock of petrol and diesel both increase when compared to the previous week
  • U.S crude oil imports down by 165,000 barrels per day from the previous week
Brent crude oil trades in a range of $71-$80 per barrel

Average Dated Brent price for the week (published by Platts) decreased by $2.26 to $75.35 per barrel from the previous week's average of $77.61 a barrel, indicating 2.91% decline.

Brent crude oil continued its downward trend, recording the lowest weekly average price of the year, after the Organization of Petroleum Exporting Countries (OPEC) decided not to cut oil output to support prices, a move investors said would leave oil markets heavily oversupplied. Saudi Arabia blocked calls from poorer members of OPEC for output reductions, triggering a rout in oil markets.

“The move aligns with Saudi Arabia’s stance to allow the oil market to stabilize itself and be driven by supply and demand fundamentals,” ANZ analysts said in a note.

They again reported that "OPEC can get by at $60 a barrel, but that price would knock out a fair whack of the competition – much U.S. shale oil for example – as well as put investment in future capacity growth firmly on the back-burner."

Analysts from Barclays are predicting that “in the short term, given market skepticism that recent price levels are low enough to substantially slow U.S. output growth, we expect price levels to drop below $70/bbl for Brent and even lower for WTI (U.S. crude).”

Free on board (FOB) prices of petrol decreased by $7.15 to $742.70/MT from the previous week's average of $749.85, indicating 0.95% decline; diesel decreased by $22.50 to $676.00/MT from the previous week’s average of $698.50, indicating 3.22% decline; and LPG decreased by $7.30 to $551.20/MT from the previous week’s average of $558.50, indicating 1.31% decline, during the period under review.

The weekly average GHS/USD exchange rate appreciates compared to the previous week

The average GHS/US Dollar exchange rate appreciated when compared to the previous week. The appreciation of the Ghana Cedi against the USD, decreased marginally the contribution of the exchange rate in the Price Build-Up.

The GHS/US Dollar exchange rate for the period 24th November 2014 to 28th November 2014 was 3.1967 compared to 3.1991 during the previous week (0.07% appreciation). The GHS equivalent of FOB prices for petrol, diesel and LPG decreased by 1.03%, 3.29% and 1.38% respectively, during the same period under review.

Geopolitics

Libya’s Tripoli-based government to take legal action against buyers bypassing the state

Libya's parallel government controlling the capital will take legal action against buyers of oil bypassing the Tripoli-based state oil firm National Oil Corporation (NOC), its oil ministry said.

In a growing confrontation for control of the North African state, Libya has two rival governments since a group called Libya Dawn took over the capital in the summer and set up its own alternative administration and parliament.

Elsewhere, OPEC's decision to retain its production ceiling is not beneficial to all OPEC member states, but Iran has refrained from protesting to maintain group solidarity, Iranian oil ministry news agency Shana reported the oil minister as saying.

"I don't think that this decision is beneficial to all OPEC member countries because some countries in OPEC were against this decision," Shana quoted oil minister Bijan Zanganeh as saying, citing an interview he gave to CNN.

Inventories

Ghana’s stock of petrol and diesel both increase when compared to the previous week

Ghana’s stock of Diesel and Petrol to last 3.4 and 3.3 weeks respectively (as at November 24, 2014). These stock levels increased when compared to the previous week’s stocks to last of 3.2 and 3.0 weeks for diesel and petrol respectively.

According to the import schedule, diesel of about 68.9 million litres was expected for delivery to add to existing stockpiles for the week. Petrol of about 29.5 million litres was also expected for delivery by close of the week (November 29, 2014).

The CDU and RFCC remain shut down due to lack of feed and planned mini maintenance respectively.
The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for November 21, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.9 million barrels to 383.0 million barrels.

Gasoline stockpiles increased by 1.8 million barrels to 209.1 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 1.6 million barrels to 195.7 million barrels over the same period. Total commercial petroleum inventories decreased by 4.7 million barrels last week.

Demand and Supply

U.S crude oil imports down by 165,000 barrels per day from the previous week

The EIA in its Weekly Petroleum Status report for November 21, 2014 reported that, U.S. crude oil imports averaged about 7.5 million barrels per day last week, down by 165,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.2 million barrels per day, 6.5% below the same four-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 440,000 barrels per day. Distillate fuel imports averaged 128,000 barrels per day last week.

Total products supplied over the last four-week period averaged 19.9 million barrels per day, down by 1.2% from the same period last year.

Over the last four weeks, motor gasoline product supplied averaged about 9.2 million barrels per day, up by 1.3% from the same period last year.

Distillate fuel product supplied averaged over 3.8 million barrels per day over the last four weeks, down by 7.8% from the same period last year. Jet fuel product supplied is up 2.7% compared to the same four-week period last year.

References
  • www.bloomberg.com
  • www.reuters.com
  • www.bbc.co.uk
Tuesday(November,25 2014)

Liquefied petroleum gas: A friend not an enemy

 

In recent times, we have all been witnesses to horrifying spectacles of victims of explosions involving Liquefied Petroleum Gas (LPG) cylinders and other mishaps at some domestic places in many parts of the country, usually leading to fatality.

The catastrophic explosions at Nyaniba Health Assistants Training School in Tema, Valco Estate, the University for Development Studies in Wa, Ashaiman, Axim and Kwahu-Foda in the Eastern Region are still fresh on our minds.

This is a timely discretion of the National Petroleum Authority’s mandate as a regulator of the petroleum downstream industry in ensuring that the public understands the risks and dangers of not using LP Gas safely and discouraging any unconventional use without seeking expert advice to ensure safety.

LPG

LPG belongs to a family of chemical compounds called hydrocarbons. As the name implies, it only consists  of hydrogen and carbon atoms.

It is produced as a result of the refinery of crude oil into its various petroleum product components such as LPG, petrol, kerosene, diesel and residual fuel oil.

Properties of LPG

LPG is as safe as any other fuel to use. However, as we all know, anything that generates heat and energy, if not handled with care, can create difficulties. There are five main properties of LP Gas which are explained below;

LPG is a Gas

Firstly, LPG in its normal condition is a gas but it can be pressurised at low temperature into liquid so that it is stored in cylinders and storage vessels. 

LPG is lighter than water

The weight of LPG is about half the equivalent of water. It can be recalled that some years ago, it was reported that two people went into an LPG vessel apparently to carry out maintenance works and they died. 

There are laid down rules and procedures that have to be followed before one can go into an LPG vessel such as wearing of protective clothing, safety reinforced boot and most importantly, nose mask or breathing filters.

Before you go into an LPG vessel, you can pour water into the vessel from the top to the bottom gradually until the water fills the LPG vessel. LPG being lighter than water will gradually come to the surface and subsequently escape from the vessel. You leave the vessel for about 24 hours. 

Every LPG vessel has what we call bottom drain valves , you can drain the valves to allow the water to escape and close the valve. After that, you can go inside and work. In that case, all the LPG might have been expelled. 

It’s heavier than air

LPG roughly weighs twice as much as air. So in our kitchens,  if there is a leakage of LP gas, it can flow on the ground in gutters, depressions, and basements and can travel at a considerable distance from the point of leakage. Therefore when there is an explosion, it can travel far away from the point of leakage.

It’s highly flammable

When mixed in the right proportion with air and a source of ignition can cause an explosion. 

It’s odourless and colourless 

LPG has no scent. However, an odourant is added to LPG so that in the event of a leakage you can smell it.

Advantages

LPG offers a myriad of advantages for both end-users and the community as a whole. Simplicity of transport, storage and use are combined with its immediate availability and negligible impact on the environment. Other benefits include cost;

It’s cheaper than charcoal

Let’s take a typical 14.5kg LPG cylinder which cost about GH¢48 and a bag of charcoal which cost GH¢35 to GH¢40 which is being used by a household of about five people. 

The 14.5kg LPG can be used between eight to 10 weeks while the charcoal will not last for more than four weeks. Comparatively, LPG is cheaper to use than charcoal.

It’s environmentally friendly

It is environmentally safe and friendly, particularly in urban areas, thanks to low particle emissions, low nitrogen oxide emissions, and low sulphur content.  

What to do when you smell Gas

If you smell gas at home, the first thing to do is to open the windows to get rid of the gas. Make sure the nob to the gas cooker and the regulator is turned off.

If these two things are turned off and you can still smell the gas, then there are two possible sources of the leakage. The valve is damaged or the rubber hose is loose. 

If it is safe to do so, try to locate the source of the leakage by applying a solution of soapy water to the base of your cylinder valve or along the flexible hose. 

If bubbles appear and become bigger or increase in number then you have a leakage. Knowing where the leakage is helps prevent accidents. 

Take it to an LPG plant for replacement. 

To conclude therefore, LP Gas is very useful and almost indispensable, that is why we must always strive to abide by its rules of use to forestall unpleasant consequences.

 

The Writer is with the Public Relations and Consumer Service Department of the National Petroleum Authority.

 Email: bowusu@npa.gov.gh. The information can also be obtained from the National Petroleum Authority's website (www.npa.gov.gh)

- See more at: http://graphic.com.gh/features/opinion/34279-liquefied-petroleum-gas-a-friend-not-an-enemy.html#sthash.W41V2JuW.dpuf
In recent times, we have all been witnesses to horrifying spectacles of victims of explosions involving Liquefied Petroleum Gas (LPG) cylinders and other mishaps at some domestic places in many parts of the country, usually leading to fatality.

The catastrophic explosions at Nyaniba Health Assistants Training School in Tema, Valco Estate, the University for Development Studies in Wa, Ashaiman, Axim and Kwahu-Foda in the Eastern Region are still fresh on our minds.

This is a timely discretion of the National Petroleum Authority’s mandate as a regulator of the petroleum downstream industry in ensuring that the public understands the risks and dangers of not using LP Gas safely and discouraging any unconventional use without seeking expert advice to ensure safety.

LPG

LPG belongs to a family of chemical compounds called hydrocarbons. As the name implies, it only consists  of hydrogen and carbon atoms.

It is produced as a result of the refinery of crude oil into its various petroleum product components such as LPG, petrol, kerosene, diesel and residual fuel oil.

Properties of LPG

LPG is as safe as any other fuel to use. However, as we all know, anything that generates heat and energy, if not handled with care, can create difficulties. There are five main properties of LP Gas which are explained below;

LPG is a Gas

Firstly, LPG in its normal condition is a gas but it can be pressurised at low temperature into liquid so that it is stored in cylinders and storage vessels. 

LPG is lighter than water

The weight of LPG is about half the equivalent of water. It can be recalled that some years ago, it was reported that two people went into an LPG vessel apparently to carry out maintenance works and they died. 

There are laid down rules and procedures that have to be followed before one can go into an LPG vessel such as wearing of protective clothing, safety reinforced boot and most importantly, nose mask or breathing filters.

Before you go into an LPG vessel, you can pour water into the vessel from the top to the bottom gradually until the water fills the LPG vessel. LPG being lighter than water will gradually come to the surface and subsequently escape from the vessel. You leave the vessel for about 24 hours. 

Every LPG vessel has what we call bottom drain valves, you can drain the valves to allow the water to escape and close the valve. After that, you can go inside and work. In that case, all the LPG might have been expelled.
 
It’s heavier than air

LPG roughly weighs twice as much as air. So in our kitchens, if there is a leakage of LP gas, it can flow on the ground in gutters, depressions, and basements and can travel at a considerable distance from the point of leakage. Therefore when there is an explosion, it can travel far away from the point of leakage.

It’s highly flammable

When mixed in the right proportion with air and a source of ignition can cause an explosion. 

It’s odourless and colourless 

LPG has no scent. However, an odourant is added to LPG so that in the event of a leakage you can smell it.

Advantages

LPG offers a myriad of advantages for both end-users and the community as a whole. Simplicity of transport, storage and use are combined with its immediate availability and negligible impact on the environment. Other benefits include cost;

It’s cheaper than charcoal

Let’s take a typical 14.5kg LPG cylinder which cost about GH¢48 and a bag of charcoal which cost GH¢35 to GH¢40 which is being used by a household of about five people. 

The 14.5kg LPG can be used between eight to 10 weeks while the charcoal will not last for more than four weeks. Comparatively, LPG is cheaper to use than charcoal.

It’s environmentally friendly

It is environmentally safe and friendly, particularly in urban areas, thanks to low particle emissions, low nitrogen oxide emissions, and low sulphur content.
 
What to do when you smell Gas

If you smell gas at home, the first thing to do is to open the windows to get rid of the gas. Make sure the nob to the gas cooker and the regulator is turned off.

If these two things are turned off and you can still smell the gas, then there are two possible sources of the leakage. The valve is damaged or the rubber hose is loose. 

If it is safe to do so, try to locate the source of the leakage by applying a solution of soapy water to the base of your cylinder valve or along the flexible hose. 

If bubbles appear and become bigger or increase in number then you have a leakage. Knowing where the leakage is helps prevent accidents. 

Take it to an LPG plant for replacement. 

To conclude therefore, LP Gas is very useful and almost indispensable, that is why we must always strive to abide by its rules of use to forestall unpleasant consequences.
 
Friday(November,21 2014)

NPA BARES TEETH ON ILLEGAL PETROLEUM PRODUCTS DEALERS

Poised to ensure that bad industry practices do not thrive at the expense of others who are playing by the rules, the National Petroleum Authority (NPA) has begun a nation-wide exercise to clamp down on illegal sales of petroleum products.

The operation led by the Chief Inspector, Mrs Esther Anku and the Northern Zonal Manager, Theophilus Mohenu of NPA which was in collaboration with the security agencies, targeted table top sellers of petrol and diesel in the Kumasi metropolis, Ejisu and Asante-Akyem municipality’s in the Ashanti region.

Ten dealers engaged in the illegal trade were arrested while about 1800 litres of illegally obtained petroleum products were confiscated.

The fuel vendors sell petrol and diesel in gallons by the streets and other established locations, where fuel is placed in drums and served with the use of huge funnels to fill up gallons and vehicles of clients that turn up.

The NPA believes these table top dealers are either selling products at unapproved prices or engaged in adulteration of products to make higher profit margins.

Briefing the media, the Head of Public Relations and Consumer Services, Yaro Kasambata said the exercise was in conformity with Section 31 of the NPA Act 691(2005).

The NPA Act prohibits any person, other than one licensed under the Act, from being in possession of a petroleum product in quantities unreasonably in excess of that person’s immediate requirement.

According to Mr Kasambata, the activities of those arrested contravened the provisions of the Act as they had not been licensed by the authority to deal in the products.

He explained, however, that the exercise was limited to those who dealt in petrol and diesel but not those who sold kerosene as the law allowed petty trading in kerosene.

“We cannot tell at this stage where they get their products from but clearly from the distribution cycle in the industry, no Bulk Distribution Company will supply products to peddlers”.

The fear is that these illegal sales of petroleum products could lead to fire explosions as the dealers of the highly inflammable fuel operate with no safety measure.

Mr. Kasambata says the ongoing operation is to uphold the quality, pricing and safety in retailing of petroleum products.

“We are doing this to ensure that we can sanitize the downstream industry,” he stated. “We want to ensure that standards are applied across board in all aspects of the industry.”

The clamp down will be extended to other parts of the country.

Source: PR/CS
Thursday(November,20 2014)

A GRAND SENDOFF FOR STEVEN LARBI

Immediate past Manager for Public Relations and Consumer Service of the National Petroleum Authority (NPA), Steven Larbi has been treated to a grand sendoff party as he retires from NPA after nearly a decade of dedicated service.

The event brought together staff, top management and the governing board of the Authority to celebrate Mr. Larbi’s life-long career and dedicated service to NPA and mother Ghana.

Mr Steven Larbi has had a media career spanning nearly three decades. He was instrumental in pioneering the Public Relations and Consumer Services department of the then young NPA when it was established nearly 10 years ago. He has also contributed to the promotion of journalism in West Africa.

The event was also attended by the first CEO of NPA, John Attafuah who shared fond memories of Mr Larbi dating back to events during the interview which led to the employment of Mr. Larbi in NPA.

He said he was there to “celebrate, applaud, embrace and salute one of the finest Senior Journalist and PR Practitioner to ever walk in NPA doors as one of the first employees, our beloved friend and PR manager, Steven Larbi.”

The Chief Executive of NPA, Moses Asaga acknowledge that his brief experience with Mr Larbi prior to his retirement stands him out as an experienced and knowledgeable media practitioner hence management decision to include him on the committee of Consumer Services of the Authority.

Adding, NPA will always fall on the rich experience of Mr. Larbi when the need arises.

In his closing remarks, Steven said the party was “way over the top, but it is so much fun and I have so much enjoyed it.”

He also thanked many others, including the governing board and employees of NPA.

“I am proud to say I worked with all of you,” Steven said.

Source: PR/CS
Monday(November,10 2014)

NPA intensifies public education on LPG usage

The National Petroleum Authority (NPA) on Monday launched consumer week celebration under the theme, ‘LPG-A friend not an enemy’’ at Kwame Nkrumah Circle in Accra.

It was meant to educate Ghanaians, especially domestic users, on the usage of liquefied petroleum gas (LPG) in the country.

The consumer week celebration is observed every November, each year, to educate the public on the safe use of petroleum products and increase the public’s knowledge on their rights and responsibilities.

Speaking at the launch of the week, the Chief Executive of the NPA, Hon. Moses Asaga said “there have been series of explosions involving LPG Cylinders and LPG related fires in parts of the country in recent times, as reported by the media.

“We are concerned about these incidents, hence our focus on safety to intensify public education on the safe use and handling of LPG. These LPG related accidents have caused many deaths, injuries and destroyed properties worth millions of cedis”.

He, therefore, called on Ghanaians to observe safety rules when dealing with LPG-from bulk storage haulage, retailing and domestic handling to ensure that these accidents are reduced to the barest minimum, if not completely eliminated.

At the industry level, Mr. Asaga told the well-attended gathering that teams of technical inspectors are constantly on the move inspecting all facilities in the petroleum product supply chain, stressing from the depots, and in transit through to the retail station. They have a firm grip on these areas.

The challenge, however, he said “is the domestic handling where there is no inspector at homes and point of usage to check that the consumer is doing the right thing. Which is why we are dedicating this week to inform and educate the public that LPG is safe, if used safely? Hence the theme ‘LPG: A Friend Not An enemy’.”

Touching on awareness creation programmes, Mr. Asaga noted that over the years NPA had used a series of publicity mix to drive home the message on the safe use of LPG.

To this end, the NPA boss said “We are intensifying our audio visual animation on the safe uses of LPG which is currently showing on GTV in both English and other local languages.

“We are going to increase the telecast of these series to other networks in the coming days with a media mix of radio, TV, newspaper, website and all trending social media to ensure that no one is left in the sensitization process.

“We are also going to include radio, community durbars to remind the people that LPG is safe and they should use it safely”.

Over the years, consumption of LPG has witnessed a considerable increase. An average of 228,000 metric tonnes of LPG is supplied every year from 2010 till date.

This represents 8% of the total average petroleum products supplied to the market, according to Mr. Asaga.
It is estimated that the auto users of LPG consume about 58% of the total annual LPG supplied while households, other commercial activists and industry, together consume the remaining 42% as at 2013.

Consumption of LPG is projected to increase to 491, 000 metric tonnes in 2020 and 1.2million metric tonnes by 2030, he revealed.

This, Mr. Asaga indicated: “We have accepted LPG as a cheaper fuel. What is left to achieve is to remind consumers on the safe uses of LPG”.

A Deputy Minister of Energy and Petroleum, John Abdulai Jinapor said the theme for this year’s consumer Week Celebration could not have come at any better time than now, and called on all to make safety the key word in handling LPG, to reduce if not eliminate the reported cases fires associated with LPG.

LPG is safe if used safely. LPG is cleaner for our environment and still remains the cheaper fuel for domestic use. It ensures that the environment is presented for the next generation with the selling of fewer trees for wood fuels, he stated.

Dr Opoku Ware Ampomah, Director, Reconstructive Plastic Surgery and Burns Centre said it was important for stakeholders to preach preventive measures because no amount of plastic surgery could restore a burnt victim to his or her normal self.

“Some people’s lives have been changed, others have been traumatised and some have also become suicidal due to burns.”

He noted that for a burn victim to be treated effectively and efficiently it will require GH?26,000, an amount he said was not affordable to many, adding that the National Health Insurance only provides GH?950 for the treatment of a burn victim.


Source: PR/CS
Friday(October,31 2014)

OIL MARKET NEWS (WEEK 44): WEEK ENDED OCTOBER 31, 2014

Major Highlights
  • Brent crude oil trades in a range of $84-$87 per barrel
  • The weekly average GHS/USD exchange rate stabilize when compared to the previous week
  • Ukraine, Russia and the EU sign deal to resume gas supplies to Ukraine
  • Ghana’s stock of petrol decreases; diesel remains unchanged when compared to the previous week’s stock levels
  • Total U.S commercial petroleum inventories decreased by 8.5 million barrels last week
Brent crude oil trades in a range of $84-$87 per barrel

Average Dated Brent price for the week (published by Platts) decreased marginally by $0.10 to $85.55 per barrel from the previous week's average of $85.65 a barrel, indicating 0.12% decrease. Brent crude oil slipped as the dollar strengthened and Chinese data pointed to slower economic growth as well as weaker fuel demand in the world’s biggest energy market.

China’s services sector grew at its slowest pace in nine months in October as a cooling property sector weighed on demand, a survey, adding to signs of fragility in the world’s second-largest economy and biggest energy consumer.

The dollar powered to a seven-year peak against the yen and a two-year high against the euro, extending gains after the Bank of Japan's latest stimulus and punishing oil and gold priced in the U.S. currency.

"The optimism created by the Bank of Japan by increasing their purchase of quantitative assets has been hit by the Chinese manufacturing data, which fell well short of expectations," Naeem Aslam, chief market analyst at Ava Trade, said.

Free on board (FOB) prices of Petrol increased by $4.60 to $791.95/MT from the previous week's average of $787.35, indicating 0.58% increase; Diesel increased by $9.25 to $744.45/MT from the previous week’s average of $735.20, indicating 1.26% increase; and LPG increased by $1.20 to $566.00/MT from the previous week’s average of $564.80, indicating 0.21% increase, during the period under review.

The weekly average GHS/USD exchange rate stabilize when compared to the previous week

The average GHS/US Dollar exchange rate stabilized when compared to the previous week. The stability of the Ghana Cedi against the USD, resulted in no change in the USD values and the GHS equivalent FOB prices.

The GHS/US Dollar exchange rate for the period 27th October2014 to 31st October 2014 was 3.1967 compared to 3.1967 during the previous week. The GHS equivalent of FOB prices for petrol, diesel and LPG increased by 0.58%, 1.26% and 0.21% respectively, during the same period under review.

Geopolitics

Ukraine, Russia and the EU sign deal to resume gas supplies to Ukraine

Ukraine, Russia and the European Union signed a deal that will see Moscow resume vital supplies of gas to its ex-Soviet neighbour over the winter in return for payments funded in part by Kiev's Western creditors.

After several failed rounds of talks in recent weeks as conflict rumbles on despite a ceasefire with pro-Russian rebels in eastern Ukraine, the accord also eases concerns that a new "gas war" could disrupt winter supplies if energy to EU states, notably through pipelines shut down across Ukraine since June.

Elsewhere, Iraqi security forces said they advanced to within 2 km (1.2 miles) of the city of Baiji in a new offensive to retake the country’s biggest oil refinery, besieged since June by Islamic State militants.

Backed by Shi’ite militias and army helicopters, government forces have swept through a desert area to the west of Baiji, aiming to recapture the city 200 km (130 miles) north of the capital.

Inventories

Ghana’s stock of petrol decreases; diesel remains unchanged when compared to the previous week’s stock levels

Ghana’s stock of Diesel and Petrol to last 3.3 and 2.8 weeks respectively (as at October 27, 2014). Diesel’s stock of 3.3 weeks remained unchanged compared to last week’s stock to last, while Petrol’s stock of 2.8 weeks compare unfavorably to last week’s stock of 2.9 weeks.

According to the import schedule, petrol of about 33.6 million litres was expected for delivery to add to existing stockpiles for the market. LPG of about 7 million kilogrammes was also expected for delivery by close of the week (November 1, 2014). The CDU and RFCC remain shut down for planned mini maintenance and lack of feed.
The statistical arm of the U.S. Department of Energy, the Energy Information Administration (EIA), reported in its Weekly Petroleum Status Report for October 24, 2014 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.1 million barrels to 379.7 million barrels while gasoline stockpiles decreased by 1.2 million barrels to 205.9 million barrels. Inventories of distillate fuel, a category including heating oil and diesel, decreased by 5.3 million barrels to 122.9 million barrels over the same period. Total commercial petroleum inventories decreased by 8.5 million barrels last week.

Demand and Supply

Total U.S commercial petroleum inventories decreased by 8.5 million barrels last week

The EIA in its Weekly Petroleum Status report for October 24, 2014 reported that, U.S. crude oil imports averaged about 7.1 million barrels per day last week, down by 376,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports averaged about 7.5 million barrels per day, 3.6% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 493,000 barrels per day. Distillate fuel imports averaged 40,000 barrels per day last week.

Total products supplied over the last four-week period averaged about 19.3 million barrels per day, up by 1.2% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged 8.8 million barrels per day, down by 1.1% from the same period last year.

Distillate fuel product supplied averaged about 3.6 million barrels per day over the last four weeks, down by 4.0% from the same period last year. Jet fuel product supplied is up 8.2% compared to the same four-week period last year.

References
• www.bloomberg.com
• www.reuters.com
• www.bbc.co.uk
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