Ghana’s liquefied petroleum gas market is again becoming a test of policy consistency after the Chamber of Oil Marketing Companies renewed calls for the removal of what industry players describe as nuisance taxes on LPG at a time prices are set to rise.
The call comes as consumers face fresh pressure in the second pricing window of July, with petrol, diesel and LPG all projected to record increases. According to COMAC’s latest pricing outlook LPG is expected to increase by between 1.10% and 1.30% per kilogramme.
The immediate drivers are familiar: renewed geopolitical tensions, a rebound in crude oil prices, higher prices for refined petroleum products and a slight weakening of the cedi. COMAC noted that the exchange rate moved from GH¢11.4333 to GH¢11.4970 per US dollar for the July 16 pricing window, representing a 0.55% depreciation, while Brent crude climbed above US$84.00 per barrel following renewed tensions around the Strait of Hormuz.
But the deeper issue is not simply another pricing-window adjustment. It is whether Ghana can credibly promote LPG as a clean cooking fuel while allowing taxes, levies and margins to keep it beyond the reach of the households that need it most.
For years, LPG has been framed as a transitional fuel that can reduce dependence on charcoal and firewood, ease pressure on forests and improve household health. Yet every increase in LPG prices weakens that policy ambition. When families cannot afford gas, they do not stop cooking. They switch back to charcoal, firewood or other dirtier fuels.
That is why COMAC’s tax argument matters. The Chamber has previously warned that excessive LPG taxation across West Africa is undermining clean energy goals and pushing millions of low-income households back to charcoal and firewood. COMAC Chairman Gabriel Kumi argued that LPG was intended to reduce tree-cutting for charcoal, but governments had instead imposed multiple taxes that made the cleaner fuel unaffordable for many citizens.
The contradiction is stark. Ghana wants to reduce deforestation, cut household air pollution, protect public health and promote cleaner energy. Yet its fiscal treatment of LPG risks turning a climate and health solution into a middle-income product.
COMAC has argued that across Africa, about 60.00% to 70.00% of people still rely on firewood and charcoal, and that these are often the poorest households least able to afford LPG. In Ghana, the Chamber has said LPG is mainly affordable to middle-income households, leaving many lower-income citizens priced out of the clean cooking transition.
The pricing structure explains why the debate keeps returning. Ghana’s petroleum product prices are driven by the import parity price, the exchange rate, and taxes, levies and margins. The ex-refinery price reflects the world market price and landing cost, while the cedi-dollar exchange rate converts the international price into local currency before taxes and margins are added.
That means policymakers cannot control every component of LPG pricing. Ghana does not set global crude prices. It cannot fully insulate consumers from conflict in the Middle East, shipping risks around the Strait of Hormuz or foreign exchange movements. But government does control the domestic tax and levy component. That is where COMAC’s argument is directed.
The National Petroleum Authority has also raised price floors for the second pricing window of July. The petrol floor moved from GH¢12.79 to GH¢13.28 per litre, while diesel increased from GH¢13.54 to GH¢14.35 per litre. The LPG price floor was also adjusted upward by 0.79% per kilogramme, reinforcing expectations of higher pump and retail prices.
For households, the effect will be felt directly. LPG is not a luxury item in the energy transition debate. It is a daily-use product tied to food preparation, household welfare, women’s time burden, indoor air quality and pressure on forests.
A higher LPG price can have a behavioural effect that is larger than the percentage increase suggests. For a household already operating on thin margins, even a small price rise can delay refilling a cylinder. Once refilling becomes uncertain, charcoal becomes the fallback. That is how clean cooking policies fail quietly: not through public rejection, but through affordability.
The environmental cost is also direct. When LPG becomes expensive, charcoal demand rises. Higher charcoal demand means more tree cutting, more informal production, more transport of charcoal into cities and deeper pressure on already stressed forest reserves.
Ghana’s anti-deforestation and anti-galamsey conversations often focus on mining, illegal logging and land use. But household energy is also part of the forest equation. A credible environmental policy cannot treat clean cooking fuel as merely another taxable petroleum product.
The timing of COMAC’s call is therefore important. LPG prices fell sharply in the first pricing window of July, with the minimum selling price declining from GH¢13.23 to GH¢10.11 per kilogramme, a decrease of GH¢3.12 or 23.60%. COMAC described the development as the steepest two-week decline in fuel prices since the COVID-19 oil market collapse in 2020.
That relief, however, is now being partly reversed. The sharp swing from steep price cuts to fresh increases shows how vulnerable consumers remain to global market volatility and local pricing adjustments.
It also raises a policy question: should LPG be treated the same way as petrol and diesel in Ghana’s tax framework? Petrol and diesel are transport fuels with broad commercial and private vehicle use. LPG, by contrast, is central to public health, clean cooking and forest protection. Taxing them through the same broad revenue logic may be administratively convenient, but it is not necessarily economically or socially efficient.
Government’s dilemma is real. Removing or reducing LPG taxes means sacrificing revenue at a time fiscal space remains tight. But the cost of keeping LPG expensive may be carried elsewhere in deforestation, respiratory illness, time poverty, charcoal dependence and weaker progress towards cleaner household energy.
The smarter approach would be a targeted LPG tax review rather than a blanket subsidy. Government could distinguish between levies that support legitimate safety, infrastructure and regulatory functions and those that simply raise revenue without advancing clean cooking goals. It could also combine tax relief with stronger cylinder recirculation, safety enforcement, rural distribution and targeted support for low-income households.
This is where policy must move beyond slogans. Ghana cannot speak of energy transition while leaving clean cooking affordability unresolved. It cannot condemn deforestation while making charcoal economically more attractive than LPG for poorer households.
For COMAC, the argument is commercial but also developmental. Lower LPG taxes could support higher consumption, expand market volumes, improve access and make clean cooking more realistic for ordinary households. For government, the question is whether short-term revenue from LPG levies is worth the long-term cost of slow adoption.
The latest price increase may be modest in percentage terms. But the signal is bigger. Ghana’s clean cooking transition remains fragile because it is too exposed to global prices, exchange rate movements and domestic fiscal charges.
If LPG is to become a serious bridge fuel for households, its pricing must reflect its public value. Otherwise, Ghana risks doing the opposite of what its energy and environmental policies promise: taxing citizens away from cleaner cooking and back into charcoal.
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