Ghana: LPG Marketing Association Wants 23 Percent Tax Abolished

The LPG Marketing Association in the Republic of Ghana is calling on the Akufo-Addo led administration to abolish the 23 percent tax levied on the fuel product.

Finance Minister of the West African country, Ken Ofori Atta, is expected to present a mid-year budget review in Parliament on Monday, 29^th July, 2019.

The association, is therefore urging the minister to take advantage of the mid-year budget review, to bring some form relief to Ghanaians.

“We note with grave concern that the product which used to be subsidized, has its price build-up being constituted of more than 23% taxes now.

“For example, in 2015 a typical 14.5kg LPG cylinder cost about ¢48 and a bag of charcoal then was also ¢40 whilst a bag of charcoal is now ¢45 the same 14.5kg LPG cost ¢80,” Secretary of the Association, Justice Adu Mante, said in a statement issued Thursday.

Below is a copy of the full statement:

Finance Minister Ken Ofori Atta is due to present the Mid-year budget review to Parliament on Monday with millions of Ghanaians hopeful government will present a programme that brings relief to them. 

Government now has a unique opportunity to demonstrate it is sensitive to the plight of Ghanaians by scrapping the 23 percent tax imposed on LPG. 

We note with grave concern that the product which used to be subsidized has its price build-up being constituted of more than 23% taxes now.

For example, in 2015 a typical 14.5kg LPG cylinder cost about ¢48 and a bag of charcoal then was also ¢40 whilst a bag of charcoal is now 45 cedis the same 14.5kg LPG cost 80 cedis.

This is clearly in breach of the policy decision that influenced the introduction of and the push for the utilization of LPG: to replace wood and other unhealthy fuel alternatives.

Currently, it is logical to conclude that the low-income homes have been priced-out of the LPG market resulting in the massive decline in the use of the product. 

Now, according to the Cylinder Recirculation Model (CRM), which is the implementation model for the National LPG Policy, government envisages that at less 50% of Ghanaians should have access to safe, clean and environmentally-friendly LPG for domestic, commercial and industrial usage by 2030.

We state unequivocally that the vision to increase consumption and get more people to use LPG gas is noble and government has our unalloyed support to implement this great quest.

However, we are afraid this move no matter how wonderful it sounds will not be realized anytime soon. This is because, in the existing saturated market of the product, the only way to increase use is by creating access for new users. 

Unfortunately, these same new consumers have no monetary incentive to abandon their cheaper options and jump on the LPG bandwagon because it does not make economic sense to do so. It is our contention that the removal of taxes will significantly bring down the cost of the LPG and make it possible for the ordinary Ghanaian to afford it. 

That is why we are calling upon the government to act immediately in the interest of the Ghanaian people it swore to protect and help progress. 

Yours, for God and Country.

Signed

Justice Adu Mante

Secretary