Thursday, 28 March

Reconsider 18p tax hike per kg of LPG – Marketers to gov’t

Business
The LPG marketers said the tax imposition will frustrate demand

Liquefied Petroleum Gas marketing companies are appealing to the government to reconsider the decision to impose an 18p tax on every kilogramme of gas bought by a consumer.

The companies say the tax will derail efforts of boosting LPG gas penetration from 25% to 50%.

Mr Gabriel Kumi, the Vice-Chairman of the LPG Marketing Companies Association of Ghana, told the media that the imposition of the tax will not only increase their operating cost but also overburden the consumers, as many people may not be able to purchase gas for cooking.

“We’re appealing to the government to reconsider the decision to introduce 18 pesewas [as tax] on the product and withdraw it so that we can save the LPG industry so we can encourage more people to use the product".

"We can save mother Ghana at the end of the day,” he stated.

In his view, LPG is a product with an elastic demand, which calls for a 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 so 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 - 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 GHS6.30 per kilogramme and 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.

He further added that “in the whole of West Africa, Ghana’s LPG 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.”

 

Source: classfmonline.com