BusinessDay
Nigeria's leading finance and market intelligence news report.

FG settles controversy over VAT on imported LPG

The controversies over whether Value Added Tax (VAT) should be paid on imported Liquefied Petroleum Gas LPG or not has finally been put to rest as  The Federal Government has confirmed its removal on the product.

With this decision by the government price of LPG, otherwise known as cooking gas, would be relatively stable, thus attracting more investors and consumers into the sector.

Babatunde Fowler,  Chairman, Federal Inland Revenue Service, FIRS, cleared the air on the issue when  members of the Nigeria LP Gas Association and others  met with Vice President Yemi Osinbanjo, in Abuja.

He said the measure was targeted at growing the LPG sector.

Meanwhile stakeholders have identified the strategy to be deployed to achieve the two million metric tons production and storage capacity per year as part of the 5-Year long LPG Expansion Plan Target of the current administration.

Four new terminal service providers are schedule to come upstream before the end of the year 2019 among whom are Rainoil, Technoil, Prudent Energy etc.

They also spoke well about the need for cylinder penetration as a critical success factor in deepening the impact of LPG in the Nigeria economy.

To achieve this it was learnt that the government is working closely with NLPGA to put in place a cylinder penetration scheme and also embark on nationwide awareness campaign

The challenge of delays of NLNG vessels to discharge at Apapa,Lagos  is  being  looked into by the  government so that  vessels carrying imported LPG  are  giving preference  with the attendant lead time and turn-around time implications on the businesses in the value chain.

This is happening notwithstanding the heavy investment borne by NLNG at refurbishing 2 out of the 3 existing Jetties currently in use.

Nigeria Liquefied Natural Gas (NLNG) has in the meantime reiterated its commitment to deepen the penetrating and consumption of domestic LPG and hope that the Train 7 facility, when in full operation will reduce the gap in the demand and supply of LPG in Nigeria.

It also requested that it will be appropriate to grant NLNG the first right of refusal to berth its vessels at the jetties as and when due.

NLNG is committed to delivering 350,000 tonnes of LPG into the Nigerian market annually and has signed Sales and Purchase Agreements (SPAs) with fifteen off-takers (all Nigerian companies) for the lifting of LPG for the domestic market.

The intervention, which is in line with company’s vision of helping to build a better Nigeria, has significantly contributed to the stimulation and development of the domestic LPG market in Nigeria and has effectively brought down the price of cooking gas from over N7, 000 in 2007 to less than N3, 500 per 12.5kg cylinder today

Nuhu Yakubu, President, NLPGA, described  The Nigeria LP Gas Association is the umbrella body of all stakeholders in the LP Gas sector in Nigeria. The primary objective of the Association is to promote the use of LP Gas in Nigeria at affordable costs.

“It also aims at protecting the interests of the LP Gas industry and the entire Nigerian socio-economic environment at large, through public policy advocacy, creation and facilitation of commercial and industrial opportunities, provision of business development services and observance of the highest standard of operational and business ethics. The association represents the opinion of the stakeholders on all matters, which impact on the investment environment and the Nigerian economy as a whole.”

Whatsapp mobile

Get real time updates directly on you device, subscribe now.

Comments are closed, but trackbacks and pingbacks are open.