Price of Butane Goes Up, GOB Introduces Amendment to LPG Act

Earlier this month, the price per gallon of liquefied petroleum gas, butane, increased by thirty-eight cents. The price hike was attributed to a combination of supply issues as stock levels in the United States continue to dwindle in the face of strong external demand. On Tuesday, the Briceño administration introduced a bill to amend the National Liquefied Petroleum Gas Project Act which will allow for a system of calculating the price of butane. According to Francis Fonseca, Minister of Science and Technology, the amendment will also include a condition for the purchase of LPG for importation only.  This will be done by way of a supervised tendering process.

Francis Fonseca

Francis Fonseca, Minister, MOECST

“Bill for an act to amend the National Liquefied Petroleum Gas Project Act, Act 12 of 2019 of the substantive laws of Belize Revised Edition 2011 to require the developer to obtain a license to import LPG into Belize, provide for a new LPG pricing methodology and to provide for matters connected therewith or incidental thereto. Mr. Speaker, this bill has the recommendation of the Cabinet. That act is now the subject of a legal challenge grounded primarily on the effect of the exclusive right to import, conferred by Section 5 of the act on the fundamental rights of the claimants. Under the agreement, NGCL was given an indemnity that if the exclusive agreement given for them to import LPG was declared invalid or unenforceable, the government would indemnify the company for any liability lost or damaged. Based on our legal advice, it is important to move this amendment to seek to mitigate government’s liability. The amendment seeks to achieve two things: one, delete Section Five of the act and replace it with a new section which provides that the right to import LPG into Belize and to engage in the business of selling and distributing LPG shall be subject to Section Three of the Supplies Control Regulations. So it removes the right to be granted import licenses. And two, introduces a new requirement for the acquisition of LPG for importation only by way of a supervised tendering process. This prevents the practice of transfer pricing by those companies who purchase LPG.”