The Vice-Chairman of the LPG Marketing Companies Association of Ghana, Gabriel Kumi is championing calls for the government to scrap taxes on Liquefied Petroleum Gas (LPG).
Gabriel Kumi argues that the calls to scrap the taxes are crucial to boosting the adoption of LPG as a cleaner energy source and reducing the nation’s dependence on traditional fuels which have health and environmental implications.
In an interview monitored by The High Street Journal, the Vice-Chairman stressed that the high cost of LPG is directly tied to dwindling consumption rates, with data showing a significant drop of about 13% in 2021 compared to previous years when prices surged.
Without mincing words, he says “it does not simply make sense to put taxes on LPG. It doesn’t.”
These calls come amidst decreasing consumption due to the high price of the product stemming from the imposition of taxes by the government. He adds that he cannot fathom why Ghana will impose huge taxes on the crucial product when countries like Côte d’Ivoire are subsidizing LPG.
“The product countries like Cote d’Ivoire are indeed subsidizing and if you look at 2020 with the price of LPG shut up very, very, very high in 2020. And that accounted for the drop we saw in consumption, a drop of about 13% from 2021 figures. And 2023, the price still remains very high. And that is why we are not able to reach the peak we had in 2021 and 2022,” he explained.
He added, “So obviously, there is a direct relationship between the price of the product and consumption. It’s as simple as that. LPG is an elastic product. It’s highly price sensitive. Any single pesewa you put on the price of LPG goes a long way to affect the consumption.”
He emphasized that abolishing taxes on LPG could significantly reduce its cost and encourage more Ghanaians to adopt the cleaner alternative to charcoal and firewood, which are detrimental to both health and the environment.
LPG is widely recognized as a cleaner-burning fuel that emits fewer pollutants compared to traditional biomass fuels. Its increased adoption is a cornerstone of Ghana’s strategy to meet its climate change goals under the Paris Agreement and improve indoor air quality for millions of households.
Energy experts have long advocated for policies that make LPG more affordable, citing its potential to reduce deforestation and combat the health risks associated with indoor air pollution caused by burning firewood and charcoal.
