10 April 2018

Nigeria: Govt's Ministries to Meet Over Non-Taxation of Imported Cooking Gas

Abuja — The ministries of petroleum resources and finance would soon meet to address the issue of the continued exemption from value added tax (VAT), imported Liquefied Petroleum Gas (LPG), or cooking gas, while the product that is produced in Nigeria is taxed, Brenda Ataga, a Senior Special Adviser to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said.

Speaking to journalists at a stakeholders' meeting on how to adequately deepen the role of LPG in Nigeria's domestic energy sector, Ataga who advises the petroleum minister on downstream infrastructure, said in Abuja that the government would address the existing issues and controversies surrounding non-taxation of imported gas.

According to her, government was also looking into how Nigeria's gas sector could be restructured to become more competitive and help her economic diversification from oil to gas as a sustainable energy source and revenue earner.

She explained that it was an anomaly that domestic LPG is consistently taxed by the country's tax authorities, while imported gas come into the country free of tax.

"LPG has zero import duties but there is VAT on domestic LPG and we are in discussions with the ministry of finance to balance that anomaly where imported gas has no VAT while domestic LPG has VAT," said Ataga.

She further stated: "We are discussing that so that LPG can be a more competitive field and we are addressing the issue of pricing as well."

Ataga noted that a target had been set by the ministry of petroleum resources to ensure that Nigeria produce and supply up to five million tonnes of LPG in 10 years as against the 700,000 tonnes that is currently being produced annually in-country.

On the possibility of LPG becoming an alternative fuel source in Nigeria for energy security, Ataga added that LPG could be an essential alternative to petrol; kerosene; diesel; auto-gas for transportation; as well as for cooking and power generation.

"The Nigeria Liquefied Natural Gas is one of major producer of LPG in the world. Nigeria stands at second largest producer behind Algeria (in Africa). With volumes like that, I don't know why LPG is not available to the locals, we will be looking at the domestic supply obligations that frame how much LPG is being brought into the country," Ataga stated.

She also informed that the stakeholders' meeting would look at the critical challenges of the domestic LPG market, especially its challenges with infrastructure and come up with workable solutions to them.

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