Pinned qnaadmin Liberia 17 Questions 0 Answers 0 Best Answers 14 Points View Profile 2 qnaadmin Asked: April 24, 2020In: Economics, Economics Is there an economic reason behind the constant fuel/gas shortage in Liberia? 2 Do we ascribe the national shortage of gasoline to the law of demand and supply or is something else at play? demandsupply Share Facebook 5 Answers Voted Oldest Recent Stanley Michael Oppong Added an answer on April 25, 2020 at 7:14 pm Nothing could be farther from political influence in the operational sphere of any nation, thus, this question is an arguable one especially when you are not a politician and an economist (quizzically written); however, the law of demand and supply remains existential, for there is a huge consumption of petroleum products on the Liberian market, thereby increasing household and industrial needs for petroleum products. And in conjunction with our nation’s dependence on other supplier countries, the pandemic has rendered the importation of gasoline almost not possible amid the lock down of those nations. In furtherance to this constraint, major petroleum supply chain companies in Liberia are responding as a function of the taxes they incur when bringing the commodity into the country, as a result, they are dictating the quantity of petroleum in the country relative to their company’s affordability, which in a comparative narrative is scant. Equal to this, the Government of Liberia is blind-eyed to the demands of those companies to reduce the taxes levied on them especially in these turbulent times. Also, it can also be verily assumed that majority of these companies have partnerships with the elite who may be in the opposition, who, in their wisdom and for personal boon, may influence the operational strategies of these local companies to ensure importation bar on gasoline in order to strangulate the effectiveness of the government to achieve prominence and subsequently drain the economy in shortage. Like I said, nothing could be farther from politics in this situation despite the viability of the current health crisis and economic principles involved. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Emmanuel Monrovia, Liberia 0 Questions 3 Answers 0 Best Answers 26 Points View Profile Emmanuel Beginner Added an answer on April 25, 2020 at 7:04 pm Probably. And yes we could ascribe the situation to the law of supply and demand. While ascribing the situation to these factors, we should also know that we are not in a classical economy where supply creates it own demand, and the market self-adjust. We are operating a capitalist economy, which implies that these factors can be controlled. So my answer is yes, it is the law of supply and demand at play, but there’s a controlling agent, and it’s not the market. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Bill Ivans Gbafore Liberia 8 Questions 10 Answers 0 Best Answers 98 Points View Profile Bill Ivans Gbafore Teacher Added an answer on April 25, 2020 at 9:49 am Shortages under any given circumstances occurs when demand for a particular commodity exceeds availability outputs or quantity supplied. Months ago, we can allude the acute shortages of gasoline on the Liberian market to poor projection, very weak inventory systems & lapses in internal control and monitoring mechanisms at the LPRC, Ministry of Commerce, Liberia Port Authority or all other relevant actors. Whether there was an increase in taxes that affected importation negatively or failure of Government to dredge the port, those authorities if effective and robust in executing their duties would’ve provided remedies through Policies or immediate actions to avert the long term effects. But now, gasoline has hit an all time low globally – selling off negatively. Trade routes are affected likewise supply chains and production processes by COVID-19. Again, many consumers are indoor due to lockdown and the market is not favorable for petroleum products – limited flights and other socioeconomic activities. Liberia is no exception to this now. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Bill Ivans Gbafore Liberia 8 Questions 10 Answers 0 Best Answers 98 Points View Profile Bill Ivans Gbafore Teacher Added an answer on April 25, 2020 at 9:28 am Shortages of any given product is due to higher demand than output or quantity supplied. Months ago at local levels, we could allude this to poor projections, a very weak inventory system & lapses in internal control mechanisms at LPRC, MOC, & LPA or all other relevant authorities monitoring the inflow of Gasoline on the Liberian market. Now, the demand for gas is low and has hit an all time negative globally. Trade routes are affected likewise the supply chain and production processes by COVID-19. Many consumers are under lockdown and normal socioeconomic are stalled – Liberia is no exception to this. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Abram freeman Junior Student - University of Liberia 0 Questions 4 Answers 0 Best Answers 28 Points View Profile Abram freeman Beginner Junior Student - University of Liberia Added an answer on April 24, 2020 at 12:33 pm Yes, there is an economic reason behind the constant shortage of gas/fuel in Liberia and the law of demand and supply play a major role.. Firstly, The Liberia Petroleum Refinery Company [LPRC] is not manufacturing/producing Petroleum, but rather reserving and storing imported Petroleum brought into the country by SUPPLIERS..some of those suppliers are TOTAL, AMINATA and others Petroleum companies..Those SUPPLIERS are charged with hard taxes at the port on those goods..On the other hand BUYERS of those commodities such as local gas stations, camp boys, and household buy those commodities at high price because of the increase taxes pose on SUPPLIERS by Government..Because of Government inability to produce or being the sole distributor of gas/fuel, others firms who bring these commodities in the country decides how many quantity should be supplied and at what price. Those prices are determined by the taxes imposed on them by government and the amount of quantity demanded of gas/fuel in the market buy local suppliers and consumers..As a result of less demand and high taxes on these commodities there will always be shortages, because SUPPLIERS will only be supplying less interm of high taxes.. 0 Reply Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Leave an answerLeave an answerCancel reply Featured image Select file Browse Save my name, email, and website in this browser for the next time I comment.