Cooking gas marketers raise alarm over price hike

…as FG reintroduces VAT on LPG

Solomon Ezeme

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM), has raised alarm of possible gas price hike following the Federal Government’s re-imposition of Value Added Tax(VAT) on Liquified Petroleum Gas(LPG) also known as cooking gas.

Bassey Essien, NALPGAM’s Executive Secretary (ES), made this known in a press statement released in Lagos on Wednesday.

According to him, Nigerians may have to pay up to N10,000 to refill 12.5kilogram cylinder of cooking gas. EnergyDay gathered that the Government had in 2019 gazetted the removal of VAT on LPG as a product to increase its domestic utilisation.

Presently, price of refilling a 12.5kg cylinder of cooking gas costs about N6,500, an increase of 62.5 percent from N4,000 being the price for the size earlier in the year.

However, the NALPGAM ES disclosed that the policy’s reintroduction would further increase the prices of cooking gas across the country.

He said, “It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted and gazetted from VAT.

“This was gazetted in 2019 and has encouraged domestic gas utilisation. Nigerians are already complaining about the prices of cooking gas across the country, and this would further worsen the situation.’’
He noted that while the government was desirous of expanding its revenue base, it should also consider the impact the reintroduction of VAT on the importation of LPG would have in the country.

He cautioned that the initial objective of domestic availability will be defeated if cooking gas goes out of the reach of ordinary Nigerians due to the current increment in prices of the commodity.

He also noted that more than one million metric tonnes of gas were consumed by Nigerians in 2020, with about 60 per cent of the product imported by marketers.

“We import to augment the 350,000MT allocated to the domestic market by the Nigerian LNG Company Limited,” added Mr Essien.

NALPGAM boss, insisted that charging VAT on LPG would return Nigerians to era of cooking with kerosene stoves and firewood with the attendant health implications.