Re-direct dollar auction policy for imports and pricing of LPG – Energy analyst

Energy policy analyst Benjamin Nsiah wants government to re-direct its dollar auction policy towards the importation and pricing of liquified petroleum gas (LPG) in the country.

According to him, the move will address the soaring prices of LPG which have witnessed an increment from around GH¢8 per kilogram in January to GH¢15 per kilogram in the second pricing window of February 2023.

In a statement sighted by GhanaWeb Business, the energy policy analyst believes that the current prices of LPG is discouraging small businesses and households from using clean cooking methods.

“The high and unchecked surging of LPG prices is likely to reduce its consumption in 2023, negatively affecting the government's policy target of achieving 50% LPG penetration of households by 2030, and making this deadline one of the unachieved deadlines on the LPG agenda,” he noted.

He continued, “Furthermore, households forced to use unclean cooking fuels like firewood and charcoal due to the non-affordability of LPG contribute to depleting the country's forest cover, causing respiratory diseases and contributing to climate change.”

He however noted that government's previous interventions, including the Bank of Ghana forex auction to the Bulk Distributing Companies (BDCs) and the Gold for Oil policy through Bulk Oil Storage and Transportation (BOST), have somewhat stabilized or reduced the prices of petrol and diesel throughout 2022 and the first two months of 2023.

To address this, Benjamin Nsiah suggests that government re-directs its dollar auction policy towards LPG imports and pricing as BDCs would hardly need auction dollars to import diesel and petrol due to the Gold-for-Oil policy, which just commenced implementation.

“This would have a better impact on LPG price reduction compared to the scrapping of the taxes and levies of about GH¢1.21 per kilogram, which make up approximately 9 percent of the LPG price build-up in February,” the policy analyst said.

“It has become necessary to internalize the pricing of LPG and make it affordable, given the trend of international LPG prices, which has been on an upward trajectory since December 2022, rendering the impact of scrapping taxes insignificant in subsequent windows,” he concluded.

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