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) also called cooking gas.
Its President, Nosa Ogieva-Okunbor, told reporters in Lagos that VAT payment on locally processed LPG makes it expensive and unattractive to imported LPG, which does not attract VAT payment.
He noted that payment of VAT on locally processed LPG, which the Nigeria Liquefied Natural Gas Limited supplies, among other issues, make cooking gas in Nigeria to be expensive, which ought not to be because we have gas resource in abundance.
The price of 12.5 kg cylinder of cooking is between N4,200 and N4,300 as against N 3,600 in April. Ogieva-Okunbor said apart from VAT problem, some stakeholders in Nigeria’s LPG supply value chain have taken a strangle hold on the business, and are determining what the price of the commodity will be.
He said it has become imperative to develop effective policies to encourage investors to come into the LPG sector to boost market penetration and the country’s economy while protecting the environment.
He said VAT removal from the gas supplied to marketers by the NLNG will attract more investors and reduce importation of gas into the country, which is VAT free. He also called for the reduction of import duty on LPG equipment to encourage more investors and deepen LPG consumption in the country.
According to him, it is not complimentary that Nigeria remained one of the countries with the lowest LPG consumption despite the enormous natural gas reserves in the country. ”Our position is that the government has to provide the enabling environment for more people to come in. We have to remove VAT on the 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,” he said.
Ogieva-Okunbor, urged the government to beam its searchlight on marketers responsible for arbitrary increase in the price of cooking gas for personal gain, noting that the price of gas had jumped by 15 per cent in less than two weeks.
According to him, the price of 20 metric tonnes of the LPG, which was N4 million three weeks ago, increased to N4.6 million last week. He decried price instability in the domestic LPG market, which he said, was caused by a cabal delaying berthing of the LPG bearing vessels at the terminals to cause artificial scarcity.
“We have been contending with the issue of price instability because a couple of people have hijacked the government’s good gesture of installing the domestic scheme. Under the scheme, gas will be readily available in the major terminals in Lagos. When there are no supply shortages, there will be a level playing ground in terms of competition and pricing.”