FG implements cooking gas imports tax, price jumps by 100%
The Federal Government has implemented a 7.5 per cent tax on imported Liquefied Petroleum Gas, popularly called cooking gas, as the cost of the commodity leap by over 100 per cent within a period of eight months.
It was gathered on Sunday that the government implemented the VAT of LPG about three weeks ago and some dealers were also mandated to pay the tax for commodities imported several months ago.
Operators said that Nigeria imports about 70 per cent of the commodity, while the rest was mainly supplied by the Nigerian Liquefies Natural Gas Company.
It was gathered that the cost of a 12.5kg of cooking gas that sold for about N3,500 in December 2020 had jumped to about high as N6,800 in parts of Abuja.
Operators stated that the development had made small businesses and homes in rural and semi-urban areas to revert to firewood and charcoal, as the purchase of cooking gas had plunged in recent months.
The National Chairman, Liquefied Petroleum Gas Retailers Association of Nigeria, Michael Omudu, said there were three factors that caused the surge in price.
He said, “There are three factors to the hike in prices. Firstly, about 70 per cent of the gas we consume in Nigeria is imported and importers have to contend with the high cost of foreign exchange.
“Secondly, there is arise in the price of petroleum products in the international market and because of that, the cost of LPG has equally gone up. So, importers now pay more on imports.
“And thirdly, the government added VAT on imported LPG about three weeks ago. It (VAT) was 7.5 per cent of the cost of the commodity and this exacerbated the price hike of cooking gas in the past three weeks”.
Omudu stated that before the introduction of VAT, foreign exchange and cost of petroleum in the international market had been the factors causing the rise in price.
On what the government was doing about the development, the spokesperson of the Nigerian National Petroleum Corporation, Garba-Deen Muhammad, said the Minister of State for Petroleum Resources, Chief Timipre Sylva, had said the commodity was deregulated.
“We are not in position to determine gas pricing because gas is not a regulated product. But of course, we are also very concerned that prices are rising, so i am actually doing something about it in the interest of the ordinary Nigerian.
“I am calling some of the suppliers to discuss the reasons for this hike”.
He added that the intervention was outside government role.
