Expert laments market distortion over FG’s gas equipment import duty waiver
The Techno Oil Group has urged the federal government to reverse its directive, placing liquefied petroleum gas cylinders and other components on customs duties and value-added tax (VAT) payment exemption list.
The company described the directive as a clear market distortion, adding that the indigenous manufacturing companies could not compete with the dumping of substandard cylinders from Asia.
Techno Oil CEO Nkechi Obi disclosed this in an interview in Abuja on Tuesday.
Mr Obi said the duty exemption had not been reflected in the reduction in the LPG price and would not, adding that the cost of the cylinders had no impact on sales of cooking gas.
In December 2023, the federal government had exempted the importation of LPG and Compressed Natural Gas equipment components from paying customs duty and VAT.
Through the finance ministry, the federal government released a circular directing the Nigerian Customs Service and the Federal Inland Revenue Service (FIRS) to apply a zero per cent duty on some gas equipment components.
They include feed gas for all processed gas, CNG, imported LPG, LPG and CNG equipment components, conversion and installation services, and all equipment relating to the expansion of CNG, LPG and the Presidential CNG initiative, including conversion kits.
According to the government, the circular is in line with the Presidential Gas for Growth Initiative, which aims to improve the investment climate in Nigeria and increase the use and supply of gas in the domestic market.
Mr Obi recalled that in 2019, former Vice-President Yemi Osinbajo inaugurated Techno Oil’s five million annual capacity LPG cylinder manufacturing plant.
“This plant can adequately meet local demand. The vice-president promised us some incentives. In fact, five other gas plants have commenced production and with job creation. But the government exempted duty to all imported LPG cylinders. This is clearly market distortion. Please, we need a reversal of this policy.
“We cannot compete with the dumping of substandard cylinders from Asia. The government should encourage companies that are adding value and increasing the gross domestic product (GDP) of the economy. The policy will end up collapsing the six manufacturing companies, and those in employment will lose their jobs, while job creation will be nil,” she warned.
(NAN)
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