FG’s removal of VAT from cooking gas is apt but should have come earlier


After extended pressure on federal government by stakeholders in the oil and gas sector, the federal government has concluded plans to remove the value added tax (VAT) on liquefied petroleum gas popularly called cooking gas in the country. This removal is expected to crash the price of cooking gas by 20% once it is officially rolled out. The VAT which has been a subject of controversy between the government and the stakeholders in the sector has made the locally produced LPG available for sale  more expensive than what obtains in other neighboring countries in West Africa.

By this decision, the erstwhile low level usage of LPG will experience an increase in the country which will surely increase its demand and the demand for cooking gas accessories too. This decision by the government is belated as the number of investors in the sector which should have increased in their numbers to make the sector more viable could not invest in the sector due to multiple taxation of which VAT is the major one.

For a country that is forced to flare its excess natural gas because it has insufficient resources to adequate handle the resource, it is double the shame that the natural gas we do manage to extract, we sell at exorbitant rates. This is yet another example of how gross mismanagement of government resources harms us all.  By this decision, the government has made the sector friendly to would be investors while citizens will have access to cooking gas which is a clean source of energy and safer for the environment than the current options we use. The long term effect of this is that the pressure on our forests which has led to massive deforestation and desert encroachment will be minimal as the demand for fire wood will decrease, also the health risk associated with cooking with wood especially lung cancer will be adequately addressed.

Despite the fact that this decision should have come earlier, its better late than never.

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