Energy expert, Yussif Sulemana, has described as commendable calls on government by stakeholders within the energy sector for government to take a relook at taxes imposed on Liquefied Petroleum Gas (LPG).
According to him, this will help sustain the consumption of the product among Ghanaians. He indicated that the imposition of these taxes make it expensive for consumers to purchase.
Commenting on marketers blaming the expensive nature of LPG on high taxes, Dr Sulamana stated that in the last four weeks, the commodity in terms of hydrocarbon products have taken a decline and downward trend. This, he explained, is very good for the downstream players and players in Ghana as a matter of fact.
“LPG is also one of the commodities that is derived from crude oil. So, once the raw material begins to take downward trajectory, of course, that is also going to impact it. But if you look at our part, apart from the commodity price, I think taxes and the exchange rate have been one of the factors that has contributed to what the consumer pays at the pump. LPG in particular, I think the players have always called on the government to look at the taxes and I think it’s a commendable call that the government has to look at.”
Dr Yussif Sulemana
Dr Sulemana revealed that LPG is a product government must consider propelling its consumption and not taking steps that will dip the consumption of it.
Elaborating on what contributes to the hikes in LPG, Dr Sulemana noted that although taxes is a contributor to hikes in LPG prices, exchange rate is also another factor. However, he explained that in the last few weeks, there has been a bit a stability in the exchange rate.
“… It’s not going up, neither is it coming down also. The level of stability although it’s good, we would like it to come down but even if it’s stable and it’s coming down, I think that’s very good for business plan. Now, if you should have the global oil prices favoring, I think LPG should see a downward trend. But he trend will go far down if government should look at the taxes.”
Dr Yussif Sulemana
Possible hike in international crude prices
Commenting on the drop in crude on the international market front which is expected to have some impact on the prices of products such as LPG and diesel, Dr Sulemana stated that how long the decline in prices will take depends on the rate at which confidence returns to the financial market sector in US. In light of this, he stated that he does not expect the decline to continue.
“In fact, I was expecting oil prices to slip back to the 80’s. The pressure that is keeping it now is just the slow demand in China. China has been a force to reckon with in terms of what the commodity sells in the international market. So, when there is a bit of demand slack in China, we do have that cascading impact happening in the commodity prices…”.
Dr Yussif Sulemana
Meanwhile, Dr Sulemana indicated that the market is still a bit shaky and it requires time to regain its confidence because the factors affecting it is glaring.
“… Both the factors in the bullish camp and the factors in the bearish camp, they seem not to compete seriously among themselves. If confidence gets back to the markets, then I think we’ll have demand picking up.”
Dr Yussif Sulemana
It will be recalled that the Institute for Energy Security (IES) has revealed that it expects the prices of petrol, diesel and Liquefied Petroleum Gas (LPG) to fall marginally again at the pumps from tomorrow, May 16, 2023, for the next 14 days.
The Institute, this is due to reduction in prices of finished products on the world market and the stability of the cedi. Owing to this, it explained that diesel, petrol and LPG are expected to sell at GHC12.30, GHC12.15 and GHC12.12 respectively.
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