The Liquefied Petroleum Gas (LPG) Marketers Association is warning that consumption of LPG will decline by 20% by the end of the year if prices of the commodity remain high and government fails to scrap taxes on the commodity.
This is coming despite an expected 50 pesewas reduction per kilogramme from this weekend (2nd July, 2022).
The fall in the price of the commodity is due to a reduction in the price of crude oil on the world market.
But speaking to Joy Business, Vice President of the LPG Marketers Association, Gabriel Kumi said the price of the product may go up in the next pricing window if the cedi does not stabilize and prices of crude oil rise.
“If you look at the first quarter of this year, compared to the first quarter of last year we have done about 14% reduction in consumption. For the first three months of last year, we did about 113,000 metric tonnes, but if you compare it to this year we have done about 99,000 metric tonnes for the first quarter. So if you do the mathematics you will see that the LPG consumption in Ghana has gone down by about 13% for the first quarter compared to last year.
“The projection is not looking good. We are projecting that the LPG consumption will go down about 20% by the end of 2022”, he pointed out.
Mr. Kumi also expressed concern about the government’s failure to scrap taxes on LPG to stimulate consumption.
“We have not made headway. We’ve been pushing government, we’ve been begging government, and we’ve been pleading with government to consider removing the taxes on LPG, so we can give some respite to our consumers. You know LPG is a product which is at the heart of government, government has a target of increasing consumption in Ghana, and is the only petroleum product that has a target for its consumption.
“Unfortunately, government has not been able to take the bold measures to ensure that its own objective is realised at the end of the day because you can’t sit down and watch prices escalate uncontrollably and at the same time you expect an increase in consumption; the two can never be achieved”, Mr. Kumi lamented.
He stressed that LPG has an elastic demand or is highly price-sensitive, and therefore any increase in price of the commodity will deter people from purchasing.
“LPG has an elastic demand – is highly price sensitive – so if you don’t take measures to bring down prices and you sit down and watch prices go up, there is no way we can achieve an increase in consumption.”
Between January 2022 and April 2022, total LPG consumption was estimated at 99,427 kilogramme compared to 113,194 kilogrammes the same period in 2021.
