Scrap 18 pesewas increase on gas or we pass to consumers – LPG Marketing Association to govt

The Liquefied Petroleum Gas (LPG) Marketing Companies are unhappy with an 18 pesewas increment on every kilogramme of gas, Joy News has reported.

The group said the increment will swell their cost of operations.

According to them, the 18 pesewas increment will force them to pass it to consumers which will also impede penetration access to LPG, from 25% to 50% by 2030.

The association claims the 18 pesewas increment on a kilogramme of gas was not part of the new taxes and levies in the 2021 Budget.

Vice-Chairman of the LPG Marketing Companies Association of Ghana, Gabriel Kumi, said the increment will counter government’s bid to increase LPG penetration in the country.

“We believe government cannot eat its cake and have it. You cannot set such an illaudable objective of trying to increase access and penetration of LPG from the current 25% to 50% by the year 2030. At the same time, you try to increase the price of the product through taxation.”

“We believe the two cannot go hand in hand. LPG is a product with an elastic demand which means the only way you can encounter growth is to bring down prices so you attract a lot of people into the consumption net so government’s objective can be achieved. But unfortunately, we see government acting contrary to its own objective and we think that’s not the way to go,” Mr Kumi further said.

He further raised concerns on the need for government to scrap “the existing – about 2.0% tax on LPG to make it much more affordable to the ordinary Ghanaian.”

Presently, LPG is being sold in Ghana at GH¢6.30 per kilogramme and is about the highest in West Africa, Mr Kumi stated.

“In the whole of West Africa, Ghana’s LPG is the highest and that’s why we’re surprised that government would want to go ahead and introduce more taxes on the product to defeat its own objective of trying to increase access and penetration of LPG in Ghana.”