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Nigerian Government Re-imposes Tax On Cooking Gas As Cylinder Cost Nears N10,000

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The Nigerian Association of Liquefied Petroleum Gas Marketers has described as unfortunate, the re-imposition of value-added tax on cooking gas, warning that Nigerians may have to pay up to N10,000 to buy a cylinder of cooking gas.

NALPGAM’s Executive Secretary, Bassey Essien, on Wednesday asked the President Muhammadu Buhari’s regime to reconsider the imposition of VAT on imported LPG in the country.

In 2019, the Buhari regime announced the removal of VAT on LPG, also known as cooking gas, as a way to increase its domestic utilisation.

According to Essien, a reintroduction of the policy would further increase the prices of cooking gas across the country.

The News Agency of Nigeria quoted him as saying, “It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted and put into gazette from VAT. This was put into gazette in 2019 and has encouraged domestic gas utilisation.

“Nigerians are already complaining about the prices of cooking gas across the country, and this would further worsen the situation.”

He advised that the government should consider the impact the reintroduction of VAT on the importation of LPG would have in the country amid its efforts to expand its revenue base.

“However, this goal will be defeated if cooking gas goes out of the reach of ordinary Nigerians due to the current increment in prices of the commodity.”

He mentioned that the price of a 12.5kg cylinder of cooking gas cost about N6,500, sold “for about N4,000 averagely a few months back.”

He also noted that more than one million metric tonnes of gas were consumed by Nigerians in 2020, with about 60 per cent of the product imported by marketers.

“We import to augment the 350,000MT allocated to the domestic market by the Nigerian LNG Company Limited.”

Essien insisted that charging VAT on LPG “simply means that Nigerians will pay more, and if we go on this route, the price of 12.5kg might hit N10,000 in some parts of the country by December.”

He noted that some cooking gas users were gradually reverting to using kerosene stoves and firewood with the attendant health implications.

However, the director of the Department of Petroleum Resources, Sarki Auwalu said the government reimposed VAT on imported LPG to attract investments to local gas production.

“I wouldn’t like us to be importing LPG. This is a country that has over 600TCF of gas. We have proven reserves of 206TC.”

According to him, removing 7.5 per cent VAT on LPG importation discourages potential investors in the upstream sector, which transcends to double losses for the government.

 

 

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