As an official pronouncement is highly expected from the federal government any time from now on the removal of Value Added Tax (VAT) from locally produced Liquefied Petroleum Gas (LPG) popularly called cooking gas, industry analysts say about 25 per cent drop in price is underway.
Though price of gas has no national uniformity, prices differ from region or city to city. In some parts of big cities, a 12.5kg cylinder of gas sells for N4,300 while same volume goes for less in some lowly populated areas.
However, a price crash of about 25 per cent means that consumers may buy the product from N3,400.
Business Hilights gathered from a reliable source at the Nigerian National Petroleum Corporation (NNPC) that government, out of pressure from Nigerians and the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), issues surrounding removal of VAT on cooking gas have been concluded with the Nigerian Liquefied Natural Gas (NLNG) and the Federal Inland Revenue Service (FIRS) to suspend further collection of VAT on Liquefied Petroleum Gas (LPG)
Before now, the NALPGAM has been at the forefront of championing the cause for the removal of VAT on locally produced cooking gas, saying it has been impeding on the speed of progress in local content growth in the sub sector.
The association had at several occasions, made it clear that it was imperative to develop effective policies to encourage investors to come into the LPG sector to deepen market penetration, boost the country’s economy and protect the environment.
The association noted that the planned removal of VAT on the gas supplied to marketers by NLNG would attract more investors and reduce importation of gas into the country, which is VAT-free.
Aside, VAT removal, another issue which NALPGAM has been at its forefront is the reduction of import duty on LPG equipment so as to encourage more investors to come in and deepen LPG consumption in the country.
A statement issued by the group as part of its struggle to deepen ease of doing business in the industry said “Our position is that the government has to provide the enabling environment for more people to come in. We have to remove VAT on LPG and reduce import duties on the equipment.
According to NALPGAM President, Mr. Nosa Ogieva-Okunbor, “if every stakeholder within the LPG value chain does what is right, the target would increase to about five million metric tonnes by 2025”.
He said with the emerging drop of VAT, NALPGAM will raise awareness that will grow local consumption from 700,000 metric tonnes to 1,000,000 metric tonnes yearly.
