The Nigeria Liquified Natural Gas (NLNG) Ltd. attributes the escalating cost of cooking gas in Nigeria to Foreign Exchange (FX) shortages, Federal Government import issues, and Value Added Tax (VAT), as stated by Dr. Philip Mshelbila, the Managing Director and Chief Executive, during the African Investment Forum in Marrakesh, Morocco.
Mshelbila emphasized the need for the Federal Government to tackle these factors, which he believes affect around 60% of the product’s cost, with the potential to significantly reduce cooking gas prices for the benefit of Nigerians.
“In terms of pricing, I cannot speak about the back end of the market. But you should understand that our supply makes only 40 per cent of supply for the local market.
”The remaining 60 per cent has to be imported and many of the marketers are struggling to source forex.
”LPG is also subject to import duty and VAT and that is one area that Federal the Government has to look at if we want to lower the price of the product,” he said.
Mshelbila stated that two years ago, NLNG decided to exclusively sell our butane and propane to the domestic market for use as cooking gas, and we have adhered to that commitment.
He said :” We have struggled with propane because our local market cannot take all our production.
”We have just a few customers that can take our propane which includes Indorama a private company. But they could not take all our propane and so from time to time, we export some of the products.
”Not because we want to export, but because our local market cannot take all of our production,”he said.
The head of NLNG expressed that Nigeria requires increased investments in that sector to foster further development and investment activities. He highlighted a significant investment potential in propane, citing its applicability in transportation, power generation, and cell phone towers.
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