ENERGY
How the market for LPG is stifled by unfavourable regulations
The increased reliance on imported LPG raises questions about the pricing of the product
The regulation of liquefied petroleum gas (LPG) in SA is counterproductive and discourages large-scale LPG imports, says gas and welding products supplier Afrox. The unfavourable regulatory environment stifles efforts to create a competitive LPG market that is required to significantly increase the per capita LPG consumption as part of the overall energy mix in SA, says Mark Radford, business unit head for LPG and light industries at Afrox. Afrox, owner of the Handigas brand, increasingly relies on imported LPG amid inadequate supply from SA’s ageing crude oil refineries. The proportion of imports for LPG sales in the Southern African Development Community has increased from 5% four years ago to 30%, Afrox says. The increased reliance on imported LPG raises questions about the pricing of the product, which the government regulates at the refinery gate and retail stages. Through the maximum refinery gate price, the government sets the price at which a refinery can sell LPG. LPG is pr...
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