Abuja, May 28, 2024 (NAN) The Techno Oil Group has urged the Federal Government to reverse its directive which placed Liquefied Petroleum Gas (LPG) cylinders and other components on custom 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 would not be able to compete with the dumping of substandard cylinders from Asia.
Mrs Nkechi Obi, the Group Managing Director/Chief Executive Officer (CEO), Techno Oil Ltd., disclosed this in an interview with Newsmen in Abuja on Tuesday.
Obi said the duty exemption had not reflected in reduction of LPG price and would not, adding that the cost of the cylinders had no impact on sales of cooking gas.
In Dec. 2023, the Federal Government had exempted the importation of LPG and Compressed Natural Gas (CNG) equipment components from the payment of customs duty and Value-Added Tax (VAT).
The Federal Government, through the Ministry of Finance had released a circular, directing the Nigerian Customs Service (NCS) 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, all equipment relating to the expansion of CNG, LPG and the Presidential CNG initiative, including conversion kits.
The circular according to the government is in line with the Presidential Gas for Growth Initiative, aimed at improving the investment climate in Nigeria and to increase utilisation and supply of gas in the domestic market.
Speaking with Newsmen, Obi recalled that in 2019, the 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.
