LPG price hike: Subsidize product to cushion consumers – Marketers to gov’t

LPG marketers want the government to introduce subsidies on the product to ease the burden on the consuming public.

Their calls come after consumers were hit with a 6% hike in the price of LPG at the various outlets.

Speaking on Eyewitness News, the president of the LPG marketers association, Gabriel Kumi said subsidizing the product or removing some of the taxes will make LPG more affordable and ensure that the use of the product does not witness a decline.

According to him, Ghana, in its quest to get more people to migrate from fuelwood to LPG, must also consider subsidies like other West African countries.

“We have been calling on government to as a matter of urgency consider removing all taxes on LGP because we believe that the LPG must be made tax-free. In West Africa, in La Côte d’Ivoire they are subsidizing LGP to about 30% and in Mali, there is a subsidy. Mali and Burkina Faso come to lift LPG from Ghana, yet they are able to give subsidies due to the importance of the commodity,” he said.

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The Ghana Revenue Authority (GRA) in April 2021, indicated that taxes announced in the 2021 budget, including the one on LPG, were set to take effect on May 1, 2021.

The imposition of an Energy Sector Recovery Levy of GH¢20 pesewas per litre of petrol/diesel and 18 pesewas per kg of Liquefied Petroleum Gas (LPG) had already generated controversy, with some analysts saying that it will lead to a general increase in the price of commodities.

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But according to Mr. Kumi, government’s taxes have not gone up any further, neither have the margins of the LPG marketers increased.

He said the ongoing conflict between Ukraine and Russia has resulted in the increase of the price of the commodity itself across the world.

He also blamed the depreciation of the cedi for the increase in the price of LPG.

“Government taxes haven’t gone up. Our margins have also not gone up. Two main factors are accounting for the increase, first is what is going on between Ukraine and Russia which has shot crude oil prices up and also, our cedi is unfortunately not doing too well. It is depreciating so fast.”

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Mr. Kumi also claimed that available data shows that LPG consumption in the country is dropping, although successive governments have announced plans for many more people to use LPG and with the hike in prices, the trend may stay the same.

“Any pesewa change in the price of LPG goes to affect consumption and currently LPG consumption is on the decline, so it is impossible for government’s target’ of reaching 50% penetration to happen. I’m sure we’ve reduced from 25% to 23 or 22% because consumption is going down,” he added.

Source: Citinewsroom


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