Business Hilights
Tracking Nigeria's Headline Business News Online

VAT on locally produced cooking gas discouraging investments, costs—NALPGAM

As part of renewed efforts at growing investments in locally produced Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has urged the Federal Government to remove the Value Added Tax (VAT).

Addressing the press at a recent briefing in Lagos, the president of the association, Mr Nosa Ogieva-Okunbor argued that it has become very important 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.

He argued that the removal of VAT on the gas supplied to marketers by the Nigerian Liquefied Natural Gas (NLNG) would attract more investors and reduce importation of gas into the country, which is VAT free.

Apart from removing the VAT, NALPGAM also called for the reduction of import duty on LPG equipment with a view to encouraging more investors to come in and deepen LPG consumption in the country.

Ogieva-Okunbor averred that “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.

While urging the government to effectively track marketers responsible for arbitrary increase in the price of cooking gas for personal gain, he observed that the price of 20 metric tonnes (about 35,000 litres) of the LPG, which was N4 million three weeks ago, increased to N4.6 million last week.

According to him, cooking gas price instability can be traced to a cabal delaying berthing of the LPG bearing vessels at the terminals to cause artificial scarcity.

NALPGAM President revealed further that “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.

“The Pipelines and Product Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, is tasked with the responsibility of managing the berthing of the LPG vessels at the terminals

“But some the cabal is causing a near monopoly in the LPG market as only a private terminal is able to receive imported gas product, while NLNG gas cannot find a place to berth,” Ogieva-Okunbor disclosed.