The Impact of WLPGA on Global LPG Markets

The Impact of WLPGA on Global LPG Markets

The LPG industry in Oman has grown from its first bottling plant, set up by WLPGA member National Gas Company (NGC) in 1981, to its current status of serving the entire domestic population and industry. The main sector of LPG is domestic cooking.

In the mid 1990’s the LPG market in Oman experienced a transition from being serviced by two bottling companies, to the emergence of several other bottling companies. By 2007, there were eleven bottling companies operating twenty-five plants across the Sultanate. A quota system was put in place causing differential pricing between bottlers and producers which ensued in unhealthy competition in the market. This, coupled with weak enforcement of regulations, led to a lack of good safety practices with cylinder maintenance that could potentially compromise the rights and wellbeing of consumers.

Omani Standards state that LPG cylinders be scrapped after 15 years of use. Despite this, most bottling companies do not scrap cylinders after this life span and some bottling companies recycle the unsafe cylinders by refilling them and returning them to the distribution chain, often diverting the liability onto other bottlers. This causes cross-filling of cylinders, leading to unscrupulous players adopting unfair practices which directly affect the end users.

In 2008, WLPGA visited NGC to evaluate the condition of the Omani LPG Industry and to interact with the local LPG stakeholders as well as meet with key government officials. WLPGA determined that cylinder maintenance was one of the major key factors responsible for negatively affecting the LPG industry and concluded that the existing provision of replacing a cylinder after fifteen years, irrespective of its condition, is a clear case of over-regulation.

WLPGA then made a series of recommendations which were put in place over the years which have benefited the local LPG market. As a result, there have been huge savings for the industry and unscrupulous suppliers are no longer tolerated. This eventually resulted in enhanced safety and value for consumers.

For more information please contact Alison Abbott, WLPGA Communications Director.

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