Nigerian Liquefied Natural Gas Limited (NLNG) has questioned the rationale behind the value added tax (VAT) waiver on imported cooking gas, otherwise known as Domestic Liquefied Petroleum Gas (DLPG), whereas the same product produced in-country by the company is subjected to VAT.
“A situation where there is a VAT waiver for DLPG imported into the country whereas NLNG is subjected to pay VAT on the same product it produces in-country does not make for a level playing ground,” Tony Attah, managing director, NLNG, said during the visit by the House of Representative Committee on Gas Resources to the NLNG plant complex in Bonny Island.
The House Committee in agreement with the NLNG chief executive said the policy that granted VAT waivers for imported DLPG but charged VAT for the locally produced ones was a disincentive to investment.
“If DLPG imported into the country is given such waivers, then asking the NLNG to pay VAT on DLPG it produces locally amounts to discouraging investment in the sector,” Frederick Agbedi, chairman, House of Representative Committee on Gas Resources, said.
The committee promised to wade into the issue to resolve it in no distant time.
“For us as legislators, we are ready to laws that will turn Nigeria into investment haven and we are also ready to dialogue with the executive to ensure that what the NLNG needs for a stable investment environment is provided for them so that the country will continue to reap more dividends from their investment in the company,” Agbedi said.
The visit by the House Committee provided opportunity for them to learn about the strategic business objectives and workings of the company, with a view to facilitate NLNG’s goals, aspirations and future outlook, particularly as it relates to the socio-economic development of the nation.
“We congratulate the management for the measure of success achieved by the company. We are happy about what they are doing and as a committee, we will always stand by them and encourage them to grow the industry,” the Committee chairman said.
For the NLNG chief executive, “It is a very positive development that they have come to see things for themselves. We have worked with this particular House Committee on a lot of issues in the past including the NLNG Act that we fought vigorously to defend the amendment at the time. We believed that partly because a lot of them had not visited, they did not had a feel for the plant, so it did not matter whatever we said with respect to preventing them from amending the act as it was a bit abstract to them.”
NLNG dedicates about 350,000 metric tonnes per annum of DLPG to the country through a dedicated Vessel to ensure reliable and affordable supply.
Ahmed Joda, NLNG manager, sales administration, in a presentation during the recent 2017 Nigeria Liquefied Petroleum Gas Association (NLNGA) Conference, said DLPG consumption in Nigeria was expected to grow to 1.7 million tons per annum in Nigeria by 2020, if extensive intervention strategies were adopted, adding that NLNG was also focusing on optimising coastal delivery to Apapa by revamping NPMC jetties, optimising shipping operations to reduce product shipping costs, and encouraging storage capacity development.