New investments are being envisaged in Liquefied Petroleum Gas (LPG), subsector as the Value Added Tax (VAT) placed on LPG locally produced from the Nigeria Liquefied Natural Gas company (NLNG) against imported LPG has been resolved and the tariff removed by the federal government.
The VAT imposed on the LPG from Nigeria LNG has made the product more costly than the one imported from a country like Equatorial Guinea.
With this development effort by the federal government at enhancing the domestic penetration of the product is now boosted while more consumers may embrace the product.
Billy Okoye, executive director, commercial of Petroleum Products Marketing Company, (PPMC) who spoke at the annual general meeting of the Nigerian Association of LPG marketers in Lagos said that the Nigerian National Petroleum Corporation (NNPC ) and the Federal Inland Revenue Service ( FIRS).
According to him, the issue of VAT on LPG from Nigeria LNG has been dealt with.
He said that his organisation has always been at the forefront of seeing to increase in the supply and stabilise price of the commodity in the country.
The president of the association has earlier on said that his group is making every effort to see that every house hold
Nosa Ogieva-Okunbor, president of the association, while distributing about 500 cylinders free of charge to some consumers in Lagos 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.
He commended the government for setting up a committee to look at the issue of VAT on locally produced LPG which he said has made the product out of the reach of consumers
The price of 12.5 kg cylinder of cooking gas has risen from N 3, 800 in N4, 000. Similarly, the price of 6kg cylinder has risen from N 7, 900 to N 8,500, and 3kg from N 3, 200 to N 3,700.
According to him, the price of 20 metric tonnes (about 35,000 litres) of the LPG, which was N4 million has been increased to N4.6 million
Ogieva-Okunbor said 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.
He also called for the reduction of import duty on LPG equipment in a bid to encourage more investors to come in and deepen LPG consumption in the country.
He said it was a shame that Nigeria remained one of the lowest consumers of LPG 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.