Writer : Adnan Adams Mohammed
Marketing Companies of Liquefied Petroleum Gas (LPG) and consumers have put up stiff opposition against the National Petroleum Authority’s introduction of a new levy/margin, the ‘Cylinder Re-circulation Recovery Margin as two entities have filed a lawsuit for it withdrawal.
The retailers of the LPG are afraid that, the domestic consumption of gas in Ghana as preferred globally as against the use of other fuel sources such as; firewood and coal will reduce drastically due to its high price. They vowed that, they will do everything possible to ensure that the many levies, including the newly-introduced LPG Cylinder Recovery Levy, are removed.
Already, the NPA has been sued by the Chamber of Petroleum Consumers (COPEC) and the Consumer Protection Agency (CPA) for the introduction of the levy pleading for its withdrawal. The NPA, in a circular issued on April 1, 2020, announced a new levy of GHp13.5 as Cylinder Investment Margin, to help the LPG marketing companies offset aspects of the cost involved in procuring and branding cylinders for the new energy policy (the Cylinder Recirculation Model) as well as an increase in Fuel Marking Margin from GHp3.0 to GHp4.5 per litre for fuel. But, the energy and finance expert, Alex Mould wants the government to reduce fuel prices drastically to help cushion commercials drivers who are asked to reduce number of passengers amidst social distancing.
“We believe that Ghanaian consumers are being choked with many taxes on LPG; globally, LPG consumption is on the rise, LPG is the fuel of choice. LPG consumption, globally, is growing between 8 to 10% but in Ghana, we are stagnant because we keep a lot of taxes on the product, and we are not able to grow consumption. If we don’t start doing anything drastically about the LPG prices, consumption will start going down”, Vice-Chairman of the Marketing Companies Association, Gabriel Kumi stressed in an interview, last week.
“Our association is prepared to do everything and anything to ensure that this levy does not stay. We are preparing to do everything and anything possible within the legal framework of our country to ensure that this levy goes off. In fact, our members are angry”, he told Citi TV.
The Marketers have noted that, before the introduction of the LPG Cylinder Recovery Levy, it had been calling on the government to remove existing taxes, and, therefore, they were shocked to see the introduction of a new tax at the time the price of the commodity was going down.
They said, members of the association were rather expecting the NPA to obey President Akufo-Addo’s directive of giving businesses tax waivers and a stimulus package.
“We have been appealing to them to take the taxes off. We believe this is the time that we rather need to reduce the price of the product so that we can make it accessible and affordable to every Ghanaian.
“If you look at the price build-up of LPG, there is 5 pesewas per kilo of LPG margin that consumers have been paying for the past 20 years.
“Currently, that 5 pesewas per kilo brings in GHS1.2 million a month. We don’t know what that money is being used for”, said Mr Kumi.
He added: “We are sounding a caution to our regulator that we are demanding immediate removal of this levy from the price build-up of LPG. If they don’t do it and the time comes and we are taking any action, we are expecting the consumer, the whole country to support us.”