Price of Cooking Gas to Crash as Federal Government Removes VAT
Good news has come the way of millions of Nigerians who depend on cooking gas in their daily lives as the Federal Government has announced the removal of Value Added Tax (VAT) on the essential commodity.
The Federal Government finally bowed to pressure from stakeholders during the weekend as it announced final arrangements for removing VAT on Liquefied Petroleum Gas (LPG) popularly called cooking gas.
This new development is expected to crash the price of cooking gas by as much as 20 percent. This implies that a 12.5kg of cooking gas which currently goes for N4, 300 is expected to crash to N3, 440 under the new policy.
Stakeholders in the Oil and Gas Industry have often been at loggerheads with the Federal Government that the imposition of VAT on cooking gas made the essential commodity unnecessarily expensive thereby discouraging potential consumers from embracing the use of cooking gas.
Speaking further on the policy, a source at the Nigerian National Petroleum Corporation (NNPC) revealed that government has already finalised talks with the Nigerian Liquefied Natural Gas (NLNG) and the Federal Inland Revenue Service (FIRS) to suspend further collection of VAT on cooking gas.
The source however declined to confirm when the policy would most likely be implemented but assured that an official pronouncement would be made any time from now.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has been at the forefront of applying pressure on the government to lift VAT on locally produced cooking gas.
NALPGAM had always implied that it was imperative to develop effective policies in order to encourage investors to come into the LPG sector to deepen market penetration, boost the country’s economy and protect the environment.
The association further reiterated that the removal of VAT on the gas supplied to marketers by NLNG would most assuredly attract more investors as well as reduce the importation of gas into the country, which is VAT-free.
The association also advocated for the Federal government to take a step further and reduce import duty on LPG equipment in order to encourage more investors to come in and deepen LPG consumption 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 LPG and reduce import duties on the equipment.” It said.
In further reaction to the VAT removal by the Federal Government, NALPGAM also announced plans to deepen the use of LPG by helping to boost local consumption of the essential commodity from 700,000 metric tonnes to 1,000,000 metric tonnes yearly.
NALPGAM President, Mr. Nosa Ogieva-Okunbor, reiterated that the target would increase to five million metric tonnes by 2025 if every stakeholder within the value chain played their part to the letter