– LPG Association to gov’t
Liquefied Petroleum Gas Marketing Companies are appealing that government should reconsider the decision to introduce 18 pesewas tax on every kilogramme of gas bought by a consumer.
It believes such action will derail efforts aimed at boosting the LPG gas penetration from 25% to 50%.
Gabriel Kumi, Vice Chairman of the LPG Marketing Companies Association of Ghana, told a cross-section of the media that imposition of the tax will not only increase their operating income but also overburden consumers, as many people may not be able to purchase gas as fuel for cooking.
“We’re appealing for government to reconsider the decision to introduce 18 pesewas onto the product [LPG] and withdraw it so that we can save the LPG industry. So, if we can encourage more people to use the product…we can save mother Ghana at the end of the day.”
In his view, LPG is a product with an elastic demand that calls for reduction in prices to stimulate growth.
“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 for government’s objective to be achieved. But, unfortunately, we see government acting contrary to its own objectives, and we think that’s not the way to go,” Mr. Kumi noted.
As an association, over the past three years we’ve been calling on government to consider removing the existing – about 20% – tax on LPG to make it much more affordable to the ordinary Ghanaian,” he pointed out.
Presently, LPG is being sold in Ghana at GH¢6.30 per kilogramme; and this is about the highest rate in West Africa.
Globally, LPG consumption is also on the rise, but in Ghana LPG consumption is stagnating.
“It’s relatively stagnant, we’re not growing as we should because of high prices,” Mr. Kumi said.
He further added: “In the whole of West Africa, Ghana’s LPG price 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”.