Decline in LPG consumption dangerous for Ghana; remove 15% tax – Marketers warn

Liquefied Petroleum Gas (LPG) Marketers Association has called on the government to save the nation by taking off 15 percent tax on LPG.

The year started with a kilo of LPG sold at Ghc 6.30 pesewas, now a kilo of LPG is being sold at Ghc15 which is an increment of 130 percent this year.

Commenting on the development, the Vice President of LPG Marketers Association, Gabriel Kumi said when LPG consumption declines it means that Ghana’s forests will be depleted, the rivers will dry up and the environment, in general, will also get depleted.

“We are not saying that when you take off the 15 percent every Ghanaian will start using LPG no. LPG is a product with high elasticity that responds to price change quite quickly. Any pesewa you put on LPG goes a long to affect the consumption. So we believe that the 15percent when taken off will go a long way to improve consumption of LPG in Ghana.

“The price of LPG has gone up so high that the ordinary Ghanaian is no longer able to afford it. So if you look at the living standard compiled by the Ghana Statistical Service, the consumption of charcoal is on a serious rise. But this year LPG consumption has declined about 16 percent compared to last year. So charcoal is on the rise and LPG is on the decline and this is very dangerous for Ghana,” Mr. Kumi stated on Starr Today with Joshua Kodjo Mensah.

He continued: “The immediate thing the government has to do is take off the taxes from LPG. We are paying about 15 percent taxes on LPG and we believe LPG must not be taxed. If you look at the West Africa Sub-region, countries like Cote d’Ivoire are even subsidizing LPG but in Ghana, we are rather taxing it.” 

The Vice President further explained that the cost of the LPG product on the international market has gone up, and the crude oil price has also shot up coupled with the cedi depreciation are some of the factors for the increased price of LPG.

Mr. Kumi stated the target set by the government to increase consumption of LPG from 25 percent to 50 percent by the year 2030 can only be achieved when taxes are removed.

“We need to act very quickly to stem the tide, reverse the trend and improve the use of LPG in Ghana.”