The Vice-Chairman of the Liquefied Petroleum Gas (LPG) Marketing Companies Association, Gabriel Kumi says Ghana is one of the countries in the West African sub-region with the most expensive gas retail price.
Speaking Monday on News Night on Joy FM, Mr Kumi attributed the situation to the taxes heaped on the product. According to him, about 23% of the gas price constitutes taxes and the frequent depreciation of the currency.
“We as an association launched a campaign to government that the rate at which the pump price is going the best option is for government to take out all the taxes from the LPG so that we make the product tax free,” he stated.
There has been a rapid increment of LPG prices over the past few years in the country, however, conversations on LPG price escalation reignited, when the Chamber of Petroleum Consumers calculated the rate of the commodity increment and discovered that there has been 21% increase in LPG over the past four months.
This, Mr Kumi described as “worrying” comparing Ghana to landlocked countries whose gas prices he said are cheaper.
“Most of these [landlocked] countries are even subsiding the product, but we have put a 23% tax on the product,” he noted.
He also argued that the price of LPG was affordable until between 2014 and 2015 when taxes were ‘heaped’ on the commodity which has caused its price to be on a constant increase.
“Sometime 2014, 2015 when crude oil dropped so low to about $30 per barrel, we feel that was the time government should have taken the opportunity to really improve the use of LPG. But unfortunately, government at the time took advantage of the situation and heaped a lot of taxes on the product
“So over the years what has happened is that the taxes have remained constant while crude oil price keeps moving up and this keeps shooting up the pump price to the height that we are having today,” he narrated.
However, Mr Kumi was worried that should the current situation persists, there will be a decline in the consumption of the liquefied petroleum gas which will, in turn, affect the environment.
“Between 2016 and now, when the taxes were slapped on the product, LPG consumption has slowed down and it is literally stagnant. From the statistics going forward, if we do not do anything about the price of the product, consumption of LPG will start declining,” he emphasised.
Also commenting on the issue, the Executive Secretary of the Chamber of Petroleum Consumers Ghana, Duncan Amoah, said the Atuabo Gas Plant which is the local processor of LPG and determinant of gas pricing is not performing enough.
“If you look at the global price ranking countries that ordinarily produce crude oil you will find out that their LPG is far lower than what they sell as the white product which is petrol, diesel, and kerosene.
“Unfortunately as I speak to you now, a kilogram of LPG is almost GHâ‚µ6.00 in some parts of town whilst petrol is about GHâ‚µ5.40, so it looks as though we are treating LPG much more seriously than we would treat petrol.”