Hike in LPG prices due to global prices
Depreciation affecting LPG prices
If the Ghana cedi does not experience stable growth in the coming months, prices of Liquefied Petroleum Gas (LPG) may increase due to occurrences on the global market.
This is according to the Liquefied Petroleum Marketers Association.
Vice President of the LPG Marketers Association, Gabriel Kumi, has warned that if prices of LPG remain high, consumption may decline by 20% by the end of the year despite the expected decrease in July.
“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.
The Association is still calling on the government to scrap taxes on the product.
“We have not made headway. We’ve been pushing the government, we’ve been begging the government, and we’ve been pleading with the 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, the government has a target of increasing consumption in Ghana, and is the only petroleum product that has a target for its consumption”.
“Unfortunately, the government has not been able to take the bold measures to ensure that its own objective is realized 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 added that LPG is a product whose demand is elastic, i.e., consumption changes with price changes.
“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.”
SSD/FNOQ
Gabriel Kumi is Vice President of the LPG Marketers Association