THE Nigeria LP Gas Association, NLPGA, has kicked against plans by the Petroleum Products Pricing Regulatory Agency, PPPRA, to impose an administrative fee on liquefied petroleum gas, LPG, also known as cooking gas in the nation. The association argued that imposing the administrative charge would be counter-productive, especially now that the government has taken deliberate steps to boost gas development, including LPG in Nigeria.
NLPGA, had, in response to a memo titled, “Pronouncement of Administrative Levy on LPG Operations Effective September 1, 2020,” insisted that the PPPRA has no administrative role whatsoever in the activities of Nigeria’s LPG sector as currently structured, being a fully deregulated product. Thus, it argued that any administrative fee with effect from September 1, 2020, as proposed, is ill-advised, counterproductive, and a disincentive for promoters and LPG investors.
According to the group, barely a few months after the Department of Petroleum Resources, DPR, commenced levying Off-takers’ Permit, which to the group, led to loading disruptions at a number of depots, the PPPRA has now announced that it is levying almost N50,000 per 20-metric ton, 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 NLPGA further argued that the attempt to introduce price regulation through the back door, will negatively impact retail price for an already pauperised populace, 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 added.
The group noted 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 utilization 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,” it said.
– Sept. 4, 2020 @ 18:35 GMT |