LPG Marketers advocate for tax relief as taxes constitute 22% of retail price
The Vice President of the LPG Marketers Association, Gabriel Kumi, has denounced Ghana’s taxation policies on Liquified Petroleum Gas (LPG), citing them as a significant barrier to achieving the country’s energy ambitions.
In a recent interview, Mr. Kumi highlighted the burden of taxes, which constitute nearly a quarter of the retail price of LPG, leading to elevated costs for consumers.
Despite governmental objectives to increase LPG consumption to 50% by 2030, Ghana has struggled to make significant progress.
Mr. Kumi emphasized the counterproductive nature of taxing a product the government aims to promote, arguing that high prices serve as a disincentive for consumers.
The LPG Marketers Association has persistently urged the government to reconsider its tax policies, pointing to neighboring countries like Côte d’Ivoire, where LPG enjoys subsidies, as a model for affordability and increased consumption.
“For the past seven years, consistently and persistently we have called on the government to remove the taxes on LPG because we believe it doesn’t make any sense to put taxes on LPG.
“Countries like Côte d’Ivoire are subsidizing to the tune of 20% to 25%. And, in fact, when I spoke to a colleague a few weeks ago, he couldn’t believe LPG is expensive in Ghana. He said their association has written to their government to even increase the subsidies on LPG, while Ghana’s LPG currently is one of the highest in the world.
“In 2019/2020, the government set an objective to increase consumption of LPG from 25% penetration rate to 50% by the year 2030, but so far it has failed,” he quipped.
With calls intensifying for tax relief on LPG by the LPG Marketers Association, the Government faces pressure to align its policies with its energy goals and foster a more conducive environment for LPG adoption.
