…Said too many charges squeezing gas dealership
Cooking gas dealers in Nigeria under the auspices of Nigeria LP Gas Association (NLPGA), has protested against the proposed plan by the Petroleum Products Pricing Regulatory Agency (PPPRA), to impose an administrative fee on liquefied petroleum gas (LPG), also known as cooking gas.
In a statement titled, “Pronouncement of Administrative Levy on LPG Operations Effective Sept 1, 2020” NLPGA stated that the PPPRA has no business with any administrative charges or levies whatsoever in the activities of Nigeria’s LPG sector as currently structured, being a fully deregulated product.
In the statement issued in Abuja, Thursday, NLPGA argued that the said administrative charge would be counter-productive, especially now that the government is making deliberate effort to boost use of cooking gas and achieve deeper penetration nationwide.
According to them, the administrative fee, which government said it is effective from September 1, 2020, as proposed, “is ill-advised, counterproductive, and a disincentive for promoters and LPG investors.”
The group noted that the said administrative charge is coming barely a few months after the Department of Petroleum Resources (DPR) commenced levying Off-takers’ Permit, to the group, which led to loading disruptions at a number of depots.
NLPGA said the administrative levy will be almost N50,000 per 20-metric tons (MT) truck as administrative fee.
“For instance, the current count of levies on a 20MT LPG truck has exceeded N120,000 (NUPENG – N23,000, DPR’s Off-Take Permit – N50,000, PPPRA’s ADMIN Fee – N49,200 = N122,200 just to list a few), effectively doubling the product cost,” the group lamented.
The group further argued that the attempt to introduce price regulation through the back door, will negatively impact retail price for an already pauperized Nigerian citizens, who are still struggling to recover from a Covid-19 ravaged economy.
“In the enlightened best interest of all, we contest this levy, and therefore urge PPPRA to rethink this levy, and revert to status quo,” the NLPGA said.
The emphasised that Nigeria’s LPG industry is arguably the fastest growing sector in Africa, adding that despite fluctuating foreign exchange rates and a Covid-19 battered economy, stakeholders have managed to stabilise the general affordability of the product in order not to overwhelm an already pauperised population.
“This feat of maintaining price stability at huge cost to operators amidst massive investment in infrastructure has been made possible by reason of LPG being a fully deregulated product.
“Equally exciting are several measures in order to further catalyse sectoral growth through such actions, as the waiver on VAT on LPG and LPG equipment; waiver on import duty on importation of LPG equipment; and, quite recently, the various strategic consultations to deepen gas utilisation by strengthening autogas (LPG/CNG/LNG), gas-to-power applications and initiatives.
“Unfortunately, we are saddened to note that the same government that wants to encourage deepening of LPG for alternative applications has approved a raft of levies on the industry, which will only render LPG a non-competitive product,” their statement stated.
By Chibisi Ohakah, Abuja
Be the first to know when we publish an update
