Nigeria: Group Lauds Removal of VAT On Cooking Gas, Says It Will Boost Economy

18 September 2019

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), says the removal of Value Added Tax (VAT) on cooking gas by the Federal Government will deepen market penetration, boost the country's economy and protect the environment.

Mr. Nosa Ogieva-Okunbor, President, NALPGAM, stated this during the association's Governing Council Meeting held in Lagos on Tuesday.

He noted that the removal of VAT on the cooking gas supply to marketers by Nigerian Liquefied Natural Gas (NLNG) would attract more investors and reduce importation into the country.

"This removal of VAT on Liquefied Petroleum Gas (LPG), popularly known as cooking gas, has crashed the price of cooking gas by about 30 per cent in the market.

"Currently, a 12.5kg bottle of gas which was N4,300 now sells for between N2,500 and N2,700 and has also deepened household usage of cooking gas," he said.

Ogieva-Okunbor said the association would take effective steps to deepen the use of LPG and increase local consumption from the current 700,000 metric tonnes to 1,000,000 metric tonnes annually.

He said that the target can increase to about five million metric tonnes by 2025 if stakeholders in the sector adhere to standards.

"If achieved, Nigeria will join the league of nations with a high level of LPG consumption," he said.

The President also stressed the need for the reduction of import duty on LPG equipment so as to encourage more investors to come in and deepen LPG consumption in the country.

He, however, expressed concern over growing indiscriminate establishment of gas plants in filling stations, which he said pose a great danger to the citizenry and the economy.

Ogieva-Okunbor said that the association is not against establishments of such plants but insisted that they must operate with the same Standard Operating Procedure (SOP) applicable to standard gas plants as laid down by the Department of Petroleum Resources (DPR).

He noted that the right procedure for petrol filling stations to dispense cooking gas was for them to retail already filled gas cylinders.

Ogieva-Okunbor added that the DPR had given a directive for the removal of gas plants in fuelling stations by December 2020.

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