There is an overall decline of approximately 4.47% in Liquified Petroleum Gas (LPG) consumption from January 2020 to December 2023, compared to a growth of roughly 6.43% in the preceding four-year period, spanning January 2016 and December 2019, the Institute for Energy Security(IES) has revealed.
Over the period, November 2020 recorded the highest monthly consumption of a little over 35 million kilogramme while April 2023 was found to record the lowest monthly consumption.
“From 2020 to 2023, the total annual LPG consumption in Ghana fluctuated, with a peak in 2021 (345,478,919 kilogramme), and a decrease in 2022 (305,076,209 kilogramme); while monthly consumption also witnessed fluctuations, with some months showing higher consumption than others”, it explained.
“There appears to be some seasonality in consumption over the period analysed, with August, September, and November consistently exhibiting higher consumption figures above 28 million kilogrammes on average, and February and April identified as consistently recording the lowest average consumption”, it added.
Price Surge
Overall, the IES said the ex-pump price per kilogramme of LPG more than doubled (116% increase) from GH¢5.81 to GH¢12.57 between January 2020 and December 2023, compared to 57% increase between January 2016 at GH¢3.43 and December 2019 at GH¢5.40.
Furthermore, it said the ex-pump price of LPG showed fluctuating trends from January 2020 to April 2024, adding, “There were general increasing trends in prices from the beginning of 2020 to mid-2022, with some fluctuations. After mid-2022, there is a significant spike in prices, particularly from November 2022 to April 2024, suggesting potential factors such as ex-refinery prices, supply and demand dynamics, or policies affecting LPG prices in Ghana”.
Between January 2020 and December 2023, the price per kilogramme of LPG more than doubled (116% increase) from GH¢5.81 to GH¢12.57, compared to 57% increase between January 2016 (GH¢3.43) and December 2019 (GH¢5.40).
The IES continued that the first 4 months of the year 2024 have witnessed one of the sharpest increases in LPG average price (30%) in the last 4 years, jumping to GH¢16.11 per kilogram in April first-half from GH¢12.36 per kilogram in January.
It mentioned that the increases in existing taxes and levies, and the introduction of new taxes and levies contributed significantly to the 177% increase in LPG price, from January 2020 to April 2024, with the current tax introduction of GH¢1.20 on each kilogramme of LPG aiding in the shoot up in price by roughly GH¢2.35 in a single pricing-window.
Influencing Factors of Price Increases:
Approximately 16.47% of the variance in LPG consumption data in Ghana can be explained by variations in LPG price per kilogramme, between January 2020 and December 2023.
The IES said the remaining variance in LPG consumption data in Ghana (approximately 83.53%) can be attributed to other factors not accounted for in the regression model.
The external factors that explained the variation in LPG consumption data in Ghana include reduced purchasing power of consumers due to worsened economic conditions, the cedi’s depreciation, a ban on new LPG outlets which negatively impacted on accessibility, and the introduction of government policies.
Source: Myjoyonline