LPG consumption drops by 4.47% – IES

By Hlordzie Mawuena Jessica On Apr 17, 2024

The Institute for Energy Security has disclosed a decrease of around 4.47% in Liquified Petroleum Gas (LPG) usage between January 2020 and December 2023, in contrast to a growth of about 6.43% in the preceding four years, spanning January 2016 to December 2019.

Throughout this period, November 2020 saw the highest monthly consumption, exceeding 35 million kilograms, while April 2023 marked the lowest.

In a recent regression analysis conducted by the IES, it indicated that the total annual LPG consumption in Ghana fluctuated from 2020 to 2023, peaking in 2021 at 345,478,919 kilograms and declining in 2022 to 305,076,209 kilograms.

Monthly consumption also varied, with certain months exhibiting higher usage, notably August, September, and November, averaging above 28 million kilograms, while February and April consistently recorded the lowest averages.

The ex-pump price per kilogram of LPG more than doubled, increasing by 116% from GH¢5.81 to GH¢12.57 between January 2020 and December 2023, compared to a 57% increase between January 2016 (GH¢3.43) and December 2019 (GH¢5.40).

The IES noted fluctuating trends in LPG prices from January 2020 to April 2024, with significant spikes observed from November 2022 to April 2024. Factors such as ex-refinery prices, supply and demand dynamics, and policies impacting LPG prices were identified.

The first four months of 2024 witnessed a notable 30% increase in LPG average price, rising to GH¢16.11 per kilogram in April from GH¢12.36 per kilogram in January.

Increases in existing taxes and levies, along with the introduction of new ones, contributed to a 177% price hike from January 2020 to April 2024.

Approximately 16.47% of the variation in LPG consumption in Ghana from January 2020 to December 2023 can be explained by fluctuations in LPG price per kilogram.

The remaining variance (about 83.53%) is attributed to other factors such as economic conditions, currency depreciation, restrictions on new LPG outlets, and government policies.

Source: Citi Business News