Association seeks elimination of VAT on cooking gas

May 17th, 2018

From Anthony Nwachukwu, Lagos

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has urged the Federal Government to remove Value Added Tax (VAT) on locally produced Liquefied Petroleum Gas (LPG).

Worried at the intermittent increase in cooking gas prices, NALPGAM President, Mr. Nosa Ogieva-Okunbor, told newsmen Wednesday in Lagos that the Federal Government needed to develop effective policies to draw investors to the sector to deepen market penetration, boost the economy and protect the environment.

According to him, if VAT is removed from the gas supplied to marketers by the Nigeria Liquefied Natural Gas (NLNG), it will attract more investors and reduce importation.

Ogieva-Okunbor further called for a reduction in the import duty on LPG equipment to attract investors, regretting that Nigeria remains among the lowest LPG consumers in spite of its enormous natural gas reserves.

“Government has to provide the enabling environment for more people to come in,” he said. “We have to remove VAT on LPG and reduce import duties on the equipment. When this is done, more investors will come into the market and that will help the country a great deal.”

More so, he urged the government to beam searchlight on the marketers who cause the arbitrary increase in cooking gas price, noting that prices had jumped by 15 per cent in less than two weeks.

According to him, the price of 20 metric tonnes (about 35,000 litres) of LPG, which was N4 million three weeks ago, increased to N4.6 million last week – a domestic price instability he blamed on the cabal that delays berthing of LPG vessels to create artificial scarcity.

“We have been contending with price instability because some people have hijacked government’s good gesture of installing the domestic scheme, under which gas would be readily available at the major terminals in Lagos,” he said.

“When there are no supply shortages, there will be level playground for competition and pricing. The Pipelines and Products Marketing Company – a subsidiary of the Nigerian National Petroleum Corporation, is tasked with managing the berthing of LPG vessels at the terminals.

However, “some cabals are causing a near-monopoly in the LPG market as only a private terminal is able to receive imported gas, while NLNG gas cannot find a place to berth.”

Ogieva-Okunbor further urged government to dredge the southern Escravos of the Warri Port to enable bigger gas vessels berth there and reduce concentration on Lagos ports, while also making the Warri Port commercially viable for gas marketers and other operations.

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