Review decision to introduce 18 pesewas tax on LPG

Liquefied Petroleum Gas Marketing Companies have appealed to the government to review its decision to introduce 18 pesewas tax on every kilogramme of gas bought by a consumer.

It believes such action will derail efforts of boosting the LPG gas penetration from the current 25 per cent to 50 per cent.

Gabriel Kumi, Vice Chairman of the LPG Marketing Companies Association of Ghana told a cross-section of the media that the imposition of the tax would not only increase their operating income but would also overburden consumers as many people might not be able to purchase gas as fuel for cooking.

“We’re appealing to the government to reconsider the decision to introduce 18 pesewas on the LPG and withdraw it so that we can save the industry. We need to encourage more people to use the product…we can save mother Ghana at the end of the day, ‘ he said.

In his view, LPG is a product with an elastic demand which calls for reduction in prices to stimulate growth.

“LPG is a product with an elastic demand which means the only way you can ensure growth is to bring down prices so you attract a lot of people into the consumption net so that the government’s objective can be achieved. But unfortunately, we see the government acting contrary to its own objective 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 the government to consider removing the existing 20 per cent 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 it is about the highest 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 higher prices”, Mr Kumi said.

 “In the whole of West Africa, Ghana’s LPG is the highest and that’s why we’re surprised that the 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.”

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