Gas Taxes: 60 percent of residents in urban areas unable to fill cylinders – LPG MA

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Vice President of LPG Marketers Association, Gabby Kumi, has disclosed that for the past three years, the rate of Liquefied Petroleum Gas (LPG) consumption in the country has stagnated.

Speaking on the Super Morning Show on Tuesday, February 1, 2022, he stated that about 60% of people who live in urban areas are unable to fill their cylinders to the brim when they visit LPG stations because of hikes in prices.

He said in rural areas, the percentage of people who are unable to fill their cylinders ranges between 80% and 90%.

“In fact, we are going down in terms of consumption of LPG in Ghana. One would expect that as your population is growing your consumption rate is growing too, but we’re stagnating, we are just hovering around 28,000 29,000 metric tones for the past 3 years.

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He blamed the development on various taxes imposed on the product.

“The average household cylinder [cost] is now about between GH¢120 to GH¢125. Ask yourself if the ordinary Ghanaian who is taking home GH¢500 can go to the LPG outlet and fill their cylinders? How do you expect an average worker to use about 20% of his monthly salary to go and buy just LPG?” he said.

The comment comes after the National Petroleum Authority (NPA) indicated its decision to restore the Price Stabilisation and Recovery Levies (PSRL) on petrol, diesel, and Liquefied Petroleum Gas (LPG) products effective February 1, 2022.

The restored PSRL is 16 pesewas per litre on petrol, 14 pesewas per litre on diesel, and 14 pesewas per kilogram on LPG. In a reaction, he stated that this will further decrease the consumption rate of the product.

“The irony of the situation is that government has set itself an objective to increase the consumption of the product from the current 25% penetration level to 50% by the end of 2022 [but] people cannot even afford the product. Now the product is being bought in tots,” he said.

He mentioned that people buy as low as ¢5 cedis, adding that this defeats the purpose of government’s agenda to make the product accessible to many.

“How would somebody carrying such a metal walk all the way to an LPG station and go and buy 20 to 30 cedis and go back home? It’s a matter of affordability,” he said.

He warned that if urgent steps aimed at subsiding the price of the product are not taken the country can suffer dire consequences. He, thus, called on government to remove all taxes imposed on LPG.

“LPG is a very sensitive product to price, so any pesewa increase in the price of LPG goes a long way to reduce the consumption of the product.

“LPG must be made tax-free so that we save our environment so that we can save our forest. So we can save mother Ghana,” he said.

“We appreciate the fact that government needs money, but we’ve always said that the benefit this country stands to gain by pushing up consumption of LPG far more outweighs the benefit we get from taxes,” he added.

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