COMAC and CBOD Threaten Strike Over Alleged Unlawful Diversion of LPG Fund to GCMC

Update: The Chamber of Oil Marketing Companies (COMAC) and the Chamber of Bulk Oil Distribution Companies (CBOD) have issued a formal warning of a potential industrial strike. This action is in direct response to the alleged illegal reallocation of funds from the dedicated LPG (Liquefied Petroleum Gas) Fund to the Ghana Cylinder Manufacturing Company (GCMC). The associations frame this as a severe violation of law and a direct threat to Ghana’s national LPG safety and distribution framework.

Introduction: A Battle for Statutory Integrity

A significant conflict has erupted within Ghana’s energy sector, pitting major industry associations against government financial decisions. At the heart of the dispute is the eLPG Fund, a specialized financial mechanism established by law to bolster the safe and efficient distribution of LPG across Ghana. COMAC and CBOD, representing a substantial portion of the downstream petroleum industry, allege that funds legally earmarked for bottling plant expansion and the critical Cylinder Recirculation Model (CRM) rollout have been improperly diverted to GCMC, a state-owned cylinder manufacturer. Their threat of a strike underscores the gravity with which they view this alleged breach of statutory trust, positioning it as an issue of national security, public safety, and the rule of law.

Key Points: The Core Allegations and Demands

The associations’ joint statement outlines a clear set of facts, legal interpretations, and non-negotiable demands. The primary points can be summarized as follows:

• Alleged Illegal Act: The transfer of monies from the LPG Fund to GCMC is characterized as an “unlawful diversion” and a “blatant deviation” from the fund’s legally defined purpose.
• Statutory Breach: They assert this action violates the establishing Legislative Instruments (LI 2262 and LI 2481) and the mandate of the National Petroleum Authority (NPA).
• National Risk: The diversion is framed as “perilous sabotage” of national energy policy, jeopardizing the CRM rollout—a system designed to enhance safety by replacing old, hazardous cylinders.
• Betrayal of Trust: The move is described as an “unacceptable betrayal of public trust,” turning a dedicated safety fund into what they term a “discretionary slush account.”
• Four-Point Demand: They demand: 1) An immediate halt to all disbursements to GCMC from the fund. 2) Reversal and restoration of any allocated funds. 3) A public government reaffirmation that the fund will be used only for bottling plants, CRM, and cylinder withdrawal. 4) Implementation of transparent, quarterly public audits on fund utilization.
• Ultimatum: The associations vow to pursue “every legitimate road—policy, legal, and public” to restore the fund’s integrity, explicitly threatening industrial action if their demands are not met.

Background: The Legal Architecture of the LPG Fund

To understand the severity of the allegations, one must examine the legal foundation of the contested fund.

Establishment and Legislative Mandate

The eLPG Fund was formally established under the National Petroleum Authority ( imposition of the LPG Margin) Regulations, 2020 (L.I. 2262) and later amended by L.I. 2481. These Legislative Instruments are subsidiary legislation enacted under the authority of the main Petroleum (Exploration and Production) Act. The NPA is the statutory body mandated to administer the fund. Its implementation began on April 1, 2024.

The Three Non-Negotiable Objectives

According to COMAC and CBOD, the law defines three specific, binding purposes for the fund, derived from margins levied on LPG imports:

1. Bottling Plant Development Margin (USD 44/MT): To finance the development and operation of LPG bottling plants nationwide. This aims to increase the number of licensed, safe bottling facilities, improving accessibility and reducing reliance on unsafe, informal bottling.
2. Cylinder Investment Margin (USD 36/MT): To fund the Cylinder Recirculation Model (CRM). The CRM is a cornerstone of Ghana’s LPG safety policy. It promotes the exchange of old, potentially dangerous cylinders for new, standardized, and safer ones at authorized depots, with the bottler/ distributor responsible for maintenance and safety.
3. Hazardous Cylinder Withdrawal: To finance the systematic removal and destruction of substandard, expired, or unsafe cylinders from the market, directly protecting consumers from explosion risks.

The associations are adamant: these are not suggestions or flexible guidelines. They are the statutory mandate. They argue the fund “was never intended as a discretionary pot for ad hoc allocations,” and that redirecting it to GCMC constitutes a “statutory violation that demolishes the foundation of Ghana’s LPG safety and infrastructure framework.”

Analysis: Why This Diversion is Contentious

The dispute extends beyond a simple budgetary reallocation. It strikes at the core of regulatory design, industry economics, and public safety.

1. The Primacy of Statutory Mandate Over Administrative Discretion

Legal experts would note that funds raised through a specific statutory levy (like the LPG margins) are generally considered “hypothecated” or “ring-fenced.” Their use is confined to the purposes explicitly stated in the enabling legislation. While governments retain some budgetary discretion, diverting a statutorily dedicated fund to an entity (GCMC) whose primary function (manufacturing) is not listed among the three core objectives appears, on its face, to conflict with the law. The associations’ argument hinges on this legal principle: administrative flexibility does not permit statutory violation.

2. Undermining the Cylinder Recirculation Model (CRM)

The CRM is a policy innovation designed to shift liability and ensure safety. Under the model, LPG marketers own and maintain cylinders, incentivizing them to invest in quality and safety. The Cylinder Investment Margin directly subsidizes this transition. Diverting these funds could:

• Slow the rollout of the CRM, delaying the phase-out of unsafe cylinders.
• Weaken the economic model that places responsibility for cylinder safety on the marketing companies (COMAC/CBOD members).
• Potentially increase the risk of LPG-related accidents if old cylinders remain in circulation longer.

3. Market Distortion and Unfair Competition

By providing state funds to GCMC—a manufacturer—the government may be creating an uneven playing field. The LPG Fund was designed to support the *distribution and bottling* infrastructure (the marketers and bottlers). Funding a manufacturer directly could be seen as state aid that advantages GCMC over private cylinder producers, potentially distorting the market for LPG cylinders.

4. Erosion of Public Trust and Transparency

The allegations feed a narrative of opaque financial management. The demand for quarterly public audits with independent verification highlights a perceived lack of transparency. For an industry reliant on public trust for safety, any appearance of misusing a fund marketed as a “safety fund” can be deeply damaging.

5. The “Rule of Law” vs. “Bureaucratic Convenience” Narrative

COMAC and CBOD successfully frame this as a binary choice for the government: uphold the strict letter of the law (protecting the fund’s designated use) or condone misallocation for bureaucratic convenience. This frames the issue not as a technical budget issue, but as a fundamental test of governance and commitment to legal predictability.

Practical Advice: Stakeholder Actions and Considerations

For various stakeholders, this situation presents both risks and potential courses of action.

For Government and the NPA:

1. Immediate Clarification: Issue a detailed public statement explaining the legal basis for any transfer to GCMC, citing specific sections of LI 2262/2481 that permit such an allocation.
2. Audit Trail: Commission an immediate, independent forensic audit of the LPG Fund’s disbursements since inception, with results made public.
3. Dialogue: Engage COMAC and CBOD in structured talks, presenting a clear plan to ensure the CRM and bottling plant objectives remain fully funded and on track.
4. Legal Review: Seek a formal legal opinion from the Attorney-General on the conformity of the diversion with the legislative instruments.

For COMAC and CBOD Members:

1. Documentation: Meticulously document all communications, decisions, and financial impacts related to the alleged diversion and any delays in CRM/bottling plant projects.
2. Stakeholder Coalition: Consider broadening the coalition to include consumer safety NGOs, fire service associations, and parliamentary committees on energy and finance.
3. Public Communication: Maintain a clear, fact-based public narrative focused on safety and legality, avoiding overly political or inflammatory language that could undermine credibility.
4. Contingency Planning: Prepare operational plans for a potential strike, assessing impacts on fuel supply and public services, and develop communication strategies for the public.

For the General Public and LPG Consumers:

1. Awareness: Understand that the CRM is designed to protect them from unsafe cylinders. Delays in its rollout mean older, riskier cylinders stay in use longer.
2. Vigilance: Pay attention to the safety certification labels on purchased cylinders and report any damaged or expired cylinders to the NPA or local authorities.
3. Advocacy: Use citizen engagement platforms (e.g., parliamentary constituency forums, media call-ins) to demand transparency on how the LPG safety levy is being used.

FAQ: Addressing Common Questions

Is the LPG Fund a government revenue stream or a dedicated safety levy?

It is a hypothecated levy. The margin is added to the cost of LPG imports and collected specifically for the statutory purposes defined in LI 2262/2481. It is not general government revenue to be spent at will.

What is the Cylinder Recirculation Model (CRM) and why is it important?

The CRM is a policy where LPG marketers (like COMAC/CBOD members) own and maintain the cylinders they sell. Customers pay for the gas, not the cylinder, and exchange empty cylinders at depots. This system improves safety because the entity responsible for the cylinder’s condition has a financial incentive to maintain it properly and replace old ones. The LPG Fund’s cylinder margin subsidizes this transition.

Does GCMC have a legitimate need for funding?

GCMC, as a state-owned manufacturer, may have operational needs. However, the legal question is whether those needs can be met from a fund legally restricted to bottling plant margins, CRM rollout, and cylinder withdrawal—not general manufacturing subsidies. Funding for GCMC would need to come from different budgetary sources, not the LPG Fund, according to the associations’ legal interpretation.

Could this lead to an actual LPG shortage?

Not directly from a strike threat alone, as marketers have storage. However, a prolonged strike by COMAC/CBOD members could disrupt the distribution network, affecting availability in some regions. More insidiously, the long-term diversion of CRM funds could compromise the safety of the entire cylinder fleet, increasing the risk of accidents.

Is this purely an industry dispute or a political issue?

It is both. It is an industry dispute over the interpretation and execution of a specific law (LIs 2262/2481). However, it has become a political issue because it involves a government decision on public funds, the rule of law, and the prioritization of public safety versus other potential budgetary uses. The associations are explicitly challenging the government’s legal and ethical stance.

Conclusion: Stakes Over Safety and Sovereignty

The standoff between COMAC/CBOD and the government transcends a typical labor-management dispute. It represents a critical test of regulatory fidelity in Ghana’s energy sector. The associations are not merely asking for money back; they are defending the legal architecture designed to protect millions of Ghanaians from LPG-related hazards. Their argument is that the LPG Fund’s statutory mandate is not a suggestion but a command, and its diversion to GCMC—regardless of intent—undermines the CRM, distorts the market, and breaks the public’s trust.

The outcome will signal whether Ghana’s energy policy is governed by the precise letter of its safety laws or by shifting administrative convenience. A strike would cause immediate economic disruption, but the long-term consequence of allowing the alleged diversion could be a slower, more dangerous erosion of the very safety net the LPG Fund was created to build. The government’s response—either a transparent legal justification for the transfer or a swift reversal—will determine whether it is seen as a guardian of statutory integrity or an agent of its dilution. For the Ghanaian public, the core question remains: who is ultimately accountable for the safety of the LPG cylinder in their home?

Sources and Further Reading

This analysis is based on the public joint statement from the Chamber of Oil Marketing Companies (COMAC) and the Chamber of Bulk Oil Distribution Companies (CBOD) as reported by Life Pulse Daily and MyJoyOnline. For primary source verification, stakeholders should consult:

• National Petroleum Authority (NPA) Website: For official documents on the eLPG Fund, LI 2262, LI 2481, and CRM policy guidelines.
• Ghana Legislation: The official gazette or website for the full text of L.I. 2262 and L.I. 2481.
• Ministry of Energy Statements: For any official government response or clarification on the fund’s utilization.
• Parliamentary Hansard: For any debates or questions posed in Parliament regarding the LPG Fund and GCMC funding.</li