Eric Osei Assibey, an Economics Professor at the University of Ghana wants government to as a matter of urgency, remove some levies imposed on Liquefied Petroleum Gas (LPG). This, he said will promote sustainable development.
According to Prof. Osei Assibey, the recently imposed levies on the Liquefied Petroleum Gas should be reviewed to ensure government is not unfairly targeting and overburdening the poor instead of protecting them.
“If you look at the levies in my view, they are quite regressive in nature especially when you over concentrate on VAT, you will realise that it is the poor that ends up paying more within the big cities. And so, the targeted response, is making sure it becomes more progressive so that the wealthy pay more.”
The Economics Professor further reiterated that taxes on LPG should be removed to promote sustainable development. “Remove taxes or levies from products like LPG if we are serious about sustainable development and conserving our environment, because it will encourage the poor to use more of LPG.”
Meanwhile, Prof. Osei assibey noted that “otherwise it is going to be counterproductive in the sense they are really going to drive their demands towards the environmentally harmful energy usage products.”
Moreover, Eric Osei Assibey’s call on the government is to help reduce the burden of the hike in the cost of the commodity on the poor and ensure sustainable development.
It is worth noting that, Liquefied Petroleum Gas was first introduced as a cheaper fuel source to replace wood and other environmentally unfriendly fuel sources.
But, its price build-up is made up of more than 20 per cent of taxes imposed over the years which is crippling consumers.
According to industry players, the indicative price is now GH¢6.86 from GH¢6.56 in the previous window.
However, the ex-refinery price has jumped from GH¢4.25 in the previous window to GH¢4.55 currently. The current window on the international market closed on July 11, 2021.
Meanwhile, analysts predict the international price to go up by 10.7% in the next window. This will reflect in about a 5- 6% increase in the local price. It will subsequently push the pump price up to about GH¢7.25 next pricing window which begins by Friday, July 16.
It can be recalled that after the increment of levies on LPG this year, Liquified Petroleum Gas marketers have petitioned President Nana Addo over the price increment. According to the Association, it will increase their cost of operations and overburden consumers.
They expressed surprise at the government’s decision to introduce more taxes on the product to defeat its own objective of trying to increase access and penetration of LPG in Ghana.
The association claimed the 18 pesewas increment on a kilogramme of gas was not part of the new taxes and levies in the 2021 Budget.
Meanwhile, the Vice-Chairman of the association, Gabriel Kumi noted that the country stands to benefit more from access to LPG than the amount of money the government intends to raise from the price increment.
“We will do whatever it takes so that this tax is removed because the benefits this country stands to gain by pushing the consumption of LPG from the current 25 per cent to 50 percent far more outweigh the money we are going to gain from these taxes.”
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