The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) on Wednesday urged the Federal Government to remove the Value Added Tax (VAT) on locally produced Liquefied Petroleum Gas (LPG), cooking gas.
Mr Nosa Ogieva-Okunbor, the president of the association, made the appeal at an interactive session with journalists in Lagos to address the sudden increase in price of cooking gas.
The News Agency of Nigeria (NAN) reports that the price of 12.5 kg cylinder of cooking gas has risen from N 3, 600 in April to between N4, 200 and N 4, 300 currently.
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.
Ogieva-Okunbor said 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 said the removal of VAT on the gas supplied to marketers by the Nigeria 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.
Ogieva-Okunbor, urged the Federal Government to beam its searchlight on marketers responsible for arbitrary increase in the price of cooking gas for personal gain.
He noted that the price of gas had jumped by 15 per cent in less than two weeks.
According to him, the price of 20 metric tonnes (about 35,000 litres) of the LPG, which was N4 million three weeks ago, increased to N4.6 million last week.
He decried price instability in the domestic LPG market, which he said was caused by a cabal delaying berthing of the LPG bearing vessels at the terminals to cause artificial scarcity.
“We have been contending with the issue of price instability because a couple of people have hijacked the government’s good gesture of installing the domestic scheme.
“Under the scheme, gas will be readily available in the major terminals in Lagos. When there are no supply shortages, there will be a level playing ground in terms of competition and pricing.
“The Pipelines and Product Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, is tasked with the responsibility of managing the berthing of the LPG vessels at the terminals
“But some the cabal is causing a near monopoly in the LPG market as only a private terminal is able to receive imported gas product, while NLNG gas cannot find a place to berth,” Ogieva-Okunbor said.
He noted that the effort of the government through the Minister of State, Petroleum Resource, Dr Ibe Kachikwu, to make cooking gas available to households was been scuttled by some a few individuals.
He, however, appealed to the Federal Government to dredge the Southern Escravos of Warri port to enable bigger vessels carrying gas berth to reduce concentration at Lagos ports.
He explained that the completion of the Escravos dredging would make the seaport commercially viable for gas marketers and other seaport operations.