Industry organisation the Fuels Industry Association of South Africa said the Competition Commission approved its implementation of uniform deposit fees for liquefied petroleum gas (LPG) cylinders, which is a step towards the standardisation of cylinder deposit fees across the LPG sector.

The LPG industry has long advocated for uniform and cost-reflective cylinder deposit fees to facilitate the exchange model, and this decision by the Competition Commission allows the industry to take a vital step forward, the association said.

"By using an independent third party to collate data on cylinder procurement costs, a fair deposit fee for each class of cylinder was determined and approved by the Commission.

"This approach is expected to streamline the exchange process and establish a fair, more cost-reflective deposit. It encourages investments in new cylinders by all marketers, thereby supporting a more efficient cylinder exchange programme that promotes investment and much needed industry growth," the organisation noted.

Further, it encouraged all stakeholders to prepare for a sector-wide adoption of the standardised deposit fees by November 18, as part of its ongoing commitment to optimising services and reinforcing industry growth.

South Africa’s LPG sector currently uses a hybrid cylinder model whereby in some instances, consumers purchase the cylinders themselves and refill them as needed through authorised refillers.

In other cases, consumers pay a once-off deposit on a cylinder and then exchange the empty cylinder for a refilled one, paying only for the LPG. This exchange model can continue indefinitely, with the LPG wholesaler responsible for maintaining the cylinder’s integrity.

“While the new standardised fees may result in increased deposit fees for new LPG consumers based on cylinder size, by introducing standardised deposit fees for each cylinder size category we aim to reduce barriers to cylinder exchanges and ensure a more seamless experience for consumers across South Africa,” said Fuels Industry Association of South Africa executive director Avhapfani Tshifularo.