Subsidize LPG to encourage usage – Gabriel Kumi
Mr Gabriel Kumi, President of the LPG Marketers Association has called on the government to reduce the cost of the product and also take out some taxes on the product to make it more affordable for consumers.
He explained that if Ghana wants to get most of its citizens off fuelwood to the gas, the government would need to implement some subsidies as it is done in other countries.
“We have been calling on the 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, La Côte d’Ivoire, they are subsidising LGP to about 30% and in Mali, there is a subsidy. Mali and Burkina Faso come to lift LPG from Ghana, yet they can give subsidies due to the importance of the commodity,” he said.
In April 2021 The Ghana Revenue Authority (GRA), pointed out that taxes in the 2021 budget, including the one on LPG, were set to take effect on May 1, 2021.
Already a controversy has seriously come up concerning the Energy Sector Recovery Levy of which GHp20 per litre of petrol/diesel and 18 pesewas per kg of Liquefied Petroleum Gas (LPG) was introduced, with some analysts saying that it will lead to a general increase in the price of commodities.
But Mr Kumi argued that since its introduction, the government’s taxes have not soared any further, nor have the margins of the LPG marketers increased.
He attributed the soaring of the price of the commodity partly to the ongoing conflict between Ukraine and Russia. 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.”
He also lamented that available data indicates that LPG consumption in the country is rather reducing, although successive governments have brought up ideas 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.
