Cooking Gas Prices to Surge as VAT Exemption Ends

Cooking Gas Prices to Surge as VAT Exemption Ends

By Bashir Olanrewaju

Cooking gas prices in Nigeria are set to surge after the government ended the product’s exemption from value-added tax or VAT,  according the the marketers’ association.

Consumption tax on domestic gas use was removed in 2019 but has returned under the current finance act,  Bassey Essien, executive secretary of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) told reporters in Lagos.

“It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted,” he said. “Nigerians are already complaining about the prices of cooking gas across the country, and this would further worsen the situation.”
A 12 kilogram gas cylinder that sold for 4,000 naira a year ago is currently selling for 6,500 naira. Essien fears it could reach 10,000 naira by December.

In a country with a low rate of cooking gas use despite having amongvtbe world’s biggest reserves of natural gas, the exemption from VAT was expected to encourage use, helping discourage deforestation for firewood.

The government appears to be abandoning the effort as it seeks more revenue sources with the decline of income from oil exports, for long the mainstay of Nigeria’s economy.