September 11, 2018

FG yet to remove VAT on LPG despite promises

FG yet to remove VAT on LPG despite promises

Wapco gas facility

By Udeme Akpan

Despite promises, the Federal Government has not yet removed Value Added Tax, VAT, from locally sourced Liquefied Petroleum Gas, LPG.

Investigations by Vanguard over the weekend, showed that VAT was still being charged, thereby affecting the pricing and demand for LPG in the country.

Commenting on the development, Executive Secretary, Nigeria Association of LPG Marketers, NALPGAM, Mr. Bassey Essien,  disclosed in an interview with Vanguard that the continued imposition of VAT on locally produced LPG has affected operations in Nigeria.

He said: “The VAT has made locally produced LPG more expensive than imported products. Consequently, this has affected the demand for locally produced LPG.

“It is important that the government that is seeking to boost investment, local production and increased utilisation of LPG should tackle critical issues, especially VAT that stare us in the face. The removal of VAT will stabilise the market and stimulate investment, especially as new investors will be encouraged to invest in the sector.”

Recently, the Petroleum Products Marketing Company, PPMC, a subsidiary of the Nigerian National Petroleum Corporation, NNPC, had disclosed plans by the government to remove the VAT on LPG sourced locally.

The company’s Executive Director, Commercials, Billy Okoye who revealed this at the Annual General Meeting of t NALPGAM, tagged: Lagos 2018, had stated that talks were ongoing with Nigeria LNG, NLNG, Federal Inland Revenue Service, FIRS and the NNPC on the challenges faced by marketers concerning VAT,  stressing that it would soon be stopped.


Okoye had said he did not want to be the one to announce the news on the removal of VAT on LPG in Nigeria, added that there were ongoing dialogues with NLNG as well as importers to see to the stabilisation in prices because, “it is a major way of encouraging people to divert to the usage of LPG popularly known as cooking gas.”


The President of NALPGAM, Nosa Ogieva-Okunbor, had also stated that within the week, the Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu set up an inter-ministerial committee to look into some of the challenges faced by the sector and it included the issue of the VAT charges on locally sourced gas from Bonny.