In a bid to reduce the price of Liquefied Petroleum Gas (LPG) otherwise known as cooking gas in the country, the Federal government has intensified efforts to ensure there is a significant reduction in the level of export of the product by multinational oil companies.
Multinational oil companies such as Nigeria Liquefied Natural Gas(NLNG) Limited NLNG, Exxon Mobil and Chevron according to a government officer are already making efforts to reduce the volume they export to international markets.
Dayo Adeshina, programme manager, National LPG Expansion Plan disclosed this while speaking on Channels Television programme, Sunrise Daily, stating further that a company like NLNG has up its game by moving from 300,000 metric tons to 450,000 metric tons to the local market.
He said that these are some of the things that can be done that would have an immediate effect on the price of the product.
According to him, there are also a couple of other projects that are coming on stream that would enable competition and increasing number of players. “This would bring down the price. So in a short time, the exports are going to be reduced while those volumes would be diverted to domestic market.
He said that about two million households have been impacted as far as the government plans on economic sustainability programme is concerned.
In a report by BusinessStandards, Nuhu Yakubu, Chief Executive Officer of Group Banner Gas, said the current situation and controversies surrounding the price of gas price is unfortunate.
According to him, the introduction of Value Added Tax and import duty by the government is an impediment to the growth of the market, stating that policy inconsistency is a major problem the country has consistently faced.
He said gas retailers are not finding things funny at all as their margins are dropping.
He advocated for the supply of more domestic molecules to address the issue of price in the market.
He said given the right condition, the present situation of gas would be reversed for better.
“The right condition is price, and what would provide the right pricing environment is infrastructure cost.”
He said government imposes unnecessary levies on the market thereby distorting the growth of LPG market. “Gas as a cooking fuel is an essential commodity for Nigerians and should not be target of government taxation, rather it should be seen as an enabler for household wealth creation and also for industrial growth. There is no way the government would generate taxes by taxing the product itself. It is the activities and the commerce that are generated through gas usage that government should tax.”
He said the approach to tax the product is very wrong and in any case. “Nigeria is in a situation where she has massive national security problems in her hands fuelled by desert encroachment, and she is still allowing Nigerians to go back to the forest and cut firewood.”
According to him, VAT is 7.5 percent, import duty is 5 percent but the multiplier effect of this policy reversal is very huge. “There are other obnoxious levies as well that the government has imposed. There are all sorts of agencies levying gas and non-state actors levying gas.
” You go to the terminals to load gas you have associations that have no bearing levying gas operators between N10, 000 to 15,000 per truck.”