The Oil and Gas Service Providers Association of Nigeria (OGSPAN) has urged the Federal Government not to impose the Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG).
According to OGSPAN, the planned imposition of VAT on LPG would stifle, demand, utilisation, investment and growth of the sector in the country.
In an interview with newsmen, the National President of the association, Colman Obasi, said, “As a stakeholder in the sector, we were delighted when the Federal Government previously excluded operators in the LPG sector from paying the VAT.
“We were even more delighted when it declared January 1, 2021, to December 31, 2030, as ‘The Decade of Gas Development for Nigeria’, with emphasis on LPG.
“Specifically, the official launch of The Decade of Gas was declared by President Muhammadu Buhari, on March 29, 2021, also recognised 2021 as ‘Year of Gas’.
“However, having taken these steps, we were shocked to learn that the Federal Government is currently considering imposing VAT, targeted at increasing its revenue.”
According to him, “A Presidential directive was issued on July 11, 2005, to remove VAT on LPG. But the approved memo erroneously had the word ‘import’ left on it, because at the time imports were the only source of gas.
“This meant that the Federal Inland Revenue Service (FIRS) charged VAT on locally produced LPG but there was no output VAT, so the VAT cost was absorbed as a loss by industry players.
“Industry operators fought for 14 years to reverse this situation and the Minister of Finance finally removed the VAT on ‘domestically produced gas’ under a gazette issued in 2019, thus stopping the FIRS from charging VAT on LPG under a loophole that was created in error.
“The FIRS itself, under several subsequent letters (now available in the public domain) advised companies that neither input nor output VAT was payable on LPG, in line with other petroleum products.
“Industry operators and experts had warned at the time that insertion of the phrase ‘locally produced’ in front of LPG would lead to the reverse case through this legal loophole and, yet again, another round of needless quagmire.
“Experts have repeatedly pointed observed that of all the petroleum products listed in that gazette, why was LPG singled out for the phrase ‘locally produced’?; why not gasoline and diesel, which we don’t produce and yet import over 100 times more quantity than LPG.
“The Federal Government recently launched a drive for Autogas, using LPG/propane. How can the gas industry grow Autogas when VAT is applied to increase gas cost, but a humongous tax subsidy remains on the competing gasoline/PMS? Who is going to switch when gas prices are increasing as a result of this needless tax?
“For too long, the LPG sector had suffered from many problems, including policy inconsistency, inadequate funding, and low domestic utilisation, which needs to be fully addressed by the current administration.”
Obasi also disclosed that the planned introduction of VAT on LPG could culminate in the reversal of gains already made in the Federal Government’s gas expansion programme, targeted at achieving rapid development of the sector.
According to him, “The policy is aimed at enthroning gas as preferred energy for the domestic economy because it’s comparatively cheaper.
“While a litre of government subsidised petrol, under extant price regime, actually retails for between N165 and N200 per litre, depending on different parts of the country, the average deregulated retail price per litre of LPG delivered to Abuja/FCT falls between N100/Litre for propane specification to N195/litre for butane specification.
“The cheaper of the two, being propane spec LPG, is the industry-approved standard for Autogas in Nigeria, which portends huge savings for families and businesses.
“Autogas use with deep market penetration with a reasonable switch from PMS and AGO will save Nigeria huge foreign exchange spend on fuel importation; expand Nigeria’s domestic energy mix with improved accessibility for LPG as a cleaner and cheaper energy source with multiple applicable uses.
“This will, in great measure, help consumers, especially the low-income Nigerian families, with their fast-eroding purchasing power in an increasingly difficult economic environment.
“Apart from savings on the unit price per litre or kg of gas, there is also much savings on gas, with respect to engine servicing and overall maintenance cost, compared to petrol or diesel engine maintenance cost. And it is environmentally friendlier than petrol and diesel, in terms of greenhouse gas emissions.
“Autogas use will help trigger the much-needed demand intensive use of gas, with the multiplier benefit effect on improved in-country production and supply sources, with the attendant reduction in gas flaring, and a marked increase in foreign direct investments in LPG production plants, trading and distribution infrastructure and equipment manufacturing in Nigeria, which has been on the decline in recent years,” Obasi added.
Minister Blames Judiciary For Prisons’ Congestion
The Minister of Interior, Ogbeni Rauf Aregbesola, has blamed the congestion in Nigeria’s correctional facilities on the country’s Judiciary, explaining that the Nigerian Correctional Service (NCOS) was not allowed by law to reject inmates sentenced to correctional centres or to release them.
Aregbesola, represented by Special Adviser on Nigerian Correctional Service, Suleiman Tala, stated this while delivering a paper at a policy advocacy conference entitled, “Decongestion of Correctional Centres: Status Quo”, organised as part of the 60th-anniversary celebration of the Order of The Knights of St Mulumba, Nigeria, Lagos Metropolitan Council, which was held in Lagos, adding that the primary responsibility of NCOS is to hold offenders pending the adjudication of their cases before a law court.
“It is important for the public to be aware that the NCOS and the Ministry of Interior are trying their best to tackle the issue from different angles as the length of time the inmates stay at the custodian centre is not determined by NCOS but by the justice system. I may not be able to reiterate exactly what the challenges are with the judiciary, however, as it affects the NCOS we are doing all we can not to compromise the traditional responsibility of the NCOS,” he stated.
Representing the Inspector General of Police, Baba Usman, Lagos State Commissioner of Police, Hakeem Odumosu, accepted that the police contribute to the congestion but gave his reasons.
“Inconsistence of the appearance of police officers to give evidence at trials has been identified as one of the alleged causes of prolonging trial but the IGP has mandated officers must attend court cases as at when due. The police are being hampered by a high level of distrust between the citizens and their police institution,” he stated.
Also at the conference, Lagos State Catholic Archbishop, Alfred Adewale Martins, who was represented by Rev. Paschal Uwaezeapu, stated that decongestion of the prisons would continue to be a matter as long as the government has refused to fix the country.
“The prison would continue to be congested if we don’t fix the society. As long as our society is a place where everybody takes for himself without considering the neighbour then our prison would continue to be congested. If we need to fix the prison we need to fix the family. These prisoners come from a family. We need to fix the education system also. We need to promote justice, without all these, the prison will soon overflow,” he stated.
Meanwhile, the Lagos Metropolitan Grand Knight, KSM William Adebisi, urged the government to declare a state of emergency on the congestion of prisons.
“The government needs to take the matter seriously as it affects the health of the inmates, economy of the company and behavioural change of the inmates,” he stated.
FG Seeks $3bn With Eurobond Offer
The Federal Government has announced plans for a Eurobond issuance in the International Capital Market (ICM) to raise $3billion.
The Debt Management Office (DMO) said, yesterday, that Virtual meetings with investors have been scheduled for today, and September 20, 2021.
It said, “In order to avail local investors the opportunity to invest in the Eurobonds, meetings will also be held with local investors.
“This is the first time local investors will be included in the Roadshows, and this is one of the reasons why a Nigerian Bookrunner (Chapel Hill Denham Advisory Services Ltd) was appointed as one of the Transaction Advisers.
“Through the Eurobond issuance, Nigeria is expected to raise up to $3billion but no more than $6.2billion.”
According to the DMO, the issuance for which all statutory approvals have been received, would be to implement the New External Borrowing in the 2021 Appropriation Act and that “Proceeds are for the financing of various projects in the Act.”
The agency gave further insight, saying, “In addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of Eurobonds by Nigeria benefits the country in many other strategic ways; amongst which are: 1. It is an inflow of foreign exchange, leading to an increase in External Reserves.
“External Reserves help support the Naira Exchange Rate, and Nigeria’s sovereign rating.
“When Nigeria raises funds externally, through Eurobonds, it frees up space in the domestic market for private sector and sub-national borrowers. In effect, it helps the sovereign not to crowd out other borrowers in the domestic market.
“The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector notably banks, to issue Eurobonds to raise capital in the ICM.
“By so doing, their capital base has been strengthened to provide banking services whilst also meeting regulatory requirements. Nigeria has a sovereign yield curve in the ICM, extending up to 30 years.
“The local listing of Nigeria’s Eurobonds on the Nigerian Exchange Ltd. and the FMDQ Securities Exchange Ltd., have increased the range of products on these two (2) exchanges and their respective market capitalization.
“Overall, Eurobond issuances by Nigeria and the investor meetings that precede the pricing have provided a strong global platform for Nigeria to tell its own story and opportunities available in Nigeria for investors.”
The Transaction Advisers appointed by Nigeria for the issuance were: International Bookrunners – JP Morgan, Citigroup Global Markets Limited; Joint Lead Managers -Standard Chartered Bank and Goldman Sachs; Nigerian Bookrunner – Chapel Hill Denham Advisory Services Ltd; Financial Adviser – FSDH Merchant Bank Ltd; while White & Case LLP, was appointed International Legal Adviser; and Banwo&Ighodalo would serve as Nigerian Legal Adviser.
The last time Nigeria accessed the ICM was November 2018.
Insecurity: Put Nigeria First, FG Tells Media
The Federal Government has tasked the media to put Nigeria first in the reportage of the country’s activities, particularly the fight against insecurity.
The Minister of Information and Culture, Alhaji Lai Mohammed, made the call in Abuja during the ceremony of the renaming of the News Agency of Nigeria (NAN) Headquarters Building after the former Managing Director and Board Chairman of NAN, late Wada Maida.
Mohammed said it may seem obvious and trite, but for any professional, including a journalist in Nigeria to be able to carry out his or her responsibility at all, the nation must first exist, in peace.
“In other words, if the country goes down, all professionals and everybody go down. It is that stark, and this is why I want to use this platform to appeal to our media to put Nigeria first”, Mohammed said.
Speaking further, the minister said if one picked up most newspapers, watched most television stations or listened to most radio stations in the country, one will be right to think Nigeria is a country at war.
While acknowledging that there were challenges in the country, especially in the area of security, Mohammed, however, said the Buhari administration had not only acknowledged the challenges, it is earnestly tackling the challenges.
“A good example is the decisive manner in which our gallant troops are tackling the banditry in the North-West or the way they are combating the terrorists in the North-East. Our security agencies have also successfully tackled the separatists in the South-East and South-West and the militants in the South-South. Unfortunately, these efforts have only been perfunctorily reflected in the reportage of the security challenges that we face. This is not only unfair, especially to those who are sacrificing their lives to keep us safe, it is unpatriotic.
“To illustrate the damage this non-acknowledgement of the efforts of the security agencies pose to the country, let me tell you what transpired when I recently hosted some members of the Nigerians in Diaspora Organisation (NIDO) UK Chapter, who visited me in my office here in Abuja. They said some of their colleagues who would have come to Nigeria for their programme tagged,‘A Week in and For Nigeria’ during the month of July, did not come out of fear of the security situation in Nigeria. However, those who made the trip said they travelled to their hometowns across the country and returned to Abuja safely. If Nigerians in the diaspora can be afraid to come to their country, imagine how foreigners, including investors and tourists, will feel about coming to the country.
“Whatever image problem Nigeria is suffering from today is mostly due to the unflattering portrayal of the country by the country’s media.
“Even when some media organisations report fake news, they never have the decency to retract such stories and apologise. They simply move on as if nothing has happened.
“We are not saying the media should not report on the security challenges we face. All we are saying is: Be fair and report accurately the efforts being made by the state and federal governments to tackle the challenges. Even if you don’t want to encourage the men and women in uniform fighting to keep us safe, please don’t discourage them with negative reporting. The security challenges we face today will be successfully tackled and Nigeria will not cease to exist, despite the antics of naysayers”, Mohammed added.
Mohammed congratulated the family, friends and associates of the late Maida for the great and much-deserved honour done to him.
He commended the management and staff of the NAN for coming up with the idea to immortalise the late Maida.
“The Federal Government’s decision to approve the proposal was not difficult, upon realising the role played by Alhaji Wada in making NAN the respectable agency that it is today. A man who was everything from Zonal Editor to Foreign Correspondent to Editor-in-Chief to Managing Director to Board Chairman, a man who built this glistening NAN headquarters edifice deserves to be immortalised by the organisation he served so well in his lifetime”, Mohammed stated.
Mohammed prayed that God will continue to comfort and strengthen the family of Maida, even as he prayed that the soul of the departed continues to rest in peace.
- News3 days ago
Shell Trains 40 Imo Youths For ANOS Gas Project
- Business3 days ago
Estate Surveyors Reject Housing Deficit Report
- Business3 days ago
FG To Shut Ikorodu Terminal Over Explosive Overtime Cargoes
- Sports3 days ago
Remo Stars To Appoint Ogunbote Head Coach
- Sports3 days ago
CAF CL: Why Akwa United Struggled Against CR Belouizdad
- Business3 days ago
CBN Not Supporting Solid Minerals Dev – Minister
- Sports3 days ago
NFF, Premier Lotto To Seal Partnership Deal
- Editorial3 days ago
Slaughter Market Demolition: Kudos To RSG