A Review of the Nigerian Energy Industry

Removal of LPG VAT insignificant, not worth celebrating – PENGASSAN

*LPG supply vessel.

Mkpoikana Udoma

04 September 2018, Sweetcrude, Port Harcourt — The Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has said that the removal of the five percent Value Added Tax on Liquefied Petroleum Gas, or cooking gas, by the Federal Government is insignificant and not worth celebrating.

Recall that recently the Federal Government reportedly agreed to finally remove the value added tax on locally produced LPG in the country. Though experts have often argued that the VAT imposed on cooking gas makes the product more costly thereby discouraging consumers from embracing the use of cooking gas.

But the senior oil and gas workers union advised that the government should rather commence the development of gas infrastructures in the country, in order to make the product readily available and also generate more revenue.

Speaking exclusively to our correspondent, the Zonal Chairman of PENGASSAN, Port Harcourt zone, Comr. Azubuike Azubuike, said if the gas sector is developed, not only revenue will be generated but it will reduced pollution caused by gas flaring in the country.

Azubuike further lamented that country lacks leaders who have a passion for the country and are ready to take the bull by the horns in moving the country forward.

According to him, “Does it make any significant when you removed N125 as five percent from a gas cylinder of 7kg which is about N2500? It is simply insignificant.

“Until the government is able to develop our gas infrastructures, all these rhetoric will continue to be like pouring water on a stone.

“Again, the refineries are not working, how do people get the product? NLNG is the only gas company in the country and they prefer exporting their products to make foreign exchange, hence, has remained the cash cow for the country.

“So the value added tax is not something to celebrate because a lot has to be done. Let the government develop gas infrastructures in the country.”

The PENGASSAN Zonal Chairman further explained that the gas sector must be looked into and developed for the country to make any progress economically, regretting that Nigeria has the highest deposit of gas, yet not up to 20percent of the gas resources has been harnessed.

“We don’t have electricity and our power plants are not being fired, yet we are killing the environment with gas flaring. Isn’t it interesting that we have three refineries that are not working yet we are planning to build another refinery in Katsina state?

“We are talking about our environment been polluted by gas flaring, yet we don’t have power. Brass LNG and Olokola LNG have not been developed, yet the gas could be utilised and revenue generated.

“If we can develop our gas sector, I tell you it will not only generate revenue but it will reduce pollution but leadership and the political will is what we are lacking. We need people who can take the bull by the horns. We need leaders who have a passion for the country.”

Asked about PENGASSAN’s effort in salvaging the situation and make the government think towards developing the gas sector, Azubuike explained that there is a limit to what the trade union can do, emphasising that the political will rests on the political leaders.

“For instance, PENGASSAN and NUPENG over the years have submitted a lot of papers on PIB, but today and after how many years, where is the PIB? So there is a limit to what the trade union can do.”

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