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Cooking Gas Price To Crash Further

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The price of cooking gas is about to crash further following the decision of the Nigeria Customs Service (NCS) to exempt local Liquefied Petroleum Gas (LPG) from duty and Value Added Tax (VAT) while other products that are approved in Oil and Gas Free Zones will also enjoy a 75 per cent rebate.

As of Tuesday, 22nd August, data from Beta Prices, an online marketplace where goods and services from reputable sellers are displayed for sale show that a kilogram of gas costs between N650 and N750 depending on location. Therefore, a 12.5 kg cylinder will cost between N8,125 and N9,375 to fill.

With the latest development, prices of cooking gas and other products from the oil and gas-free zones are likely to go down, giving relief to Nigerians who have been sapped by the current price hikes on all items.

The price of cooking gas started to crash in the first quarter of the year and hope for a further cut in the price of the products came following the decision of NCS to immediately implement the recommendations of a joint committee constituted by three agencies of government.

The trio of Adewale Adeniyi, the Acting Comptroller-General of Customs, Adesoji Adesugba, the Managing Director of the Nigeria Export Processing Zones Authority and Sen. Tijjani Kaura, the Managing Director of Oil and Gas Free Zone Authority on July 28 constituted a joint committee to streamline customs’ operations within the free zones.

Martin Odeh, Head, of Corporate Communications, NEPZA stated that Wale Adeniyi, the NCS Boss has promised to immediately implement the 75 per cent rebate and exemption from customs duty and VAT, the recommendation of the committee that fell within the operational policy of his agency.

“We must do what is necessary to boost the economy”, quoting Adeniyi who was worried to hear that some of his agency’s actions had inhibited the free flow of revenues from the scheme”.

“We were meant to have a coordinated collaboration and cooperation to ensure the country obtains significant benefits from the free zone scheme. All hands must now be on deck to make that happen.

“In demonstrating our commitment to streamline our policy and operations for effective management of the free zones, I wish to suggest that this committee is converted to become the Implementation Committee that will midwife the implementation of these recommendations. I wish to thank all of you for a job well done,’’ the Acting CGC said.

The rebate and the exemption from VAT are some of the incentives contained in the Finance Ministry Circular F182079 of December 2022 and the 4th October letter referenced HMFBNP/NCS/LPG/10/2022, and part of the recommendations of the report submitted by the committee last Friday asked for the immediate creation of procedure codes to kickstart the implementation of the incentives in the Finance Ministry circular F182079 and the letter referenced HMFBNP/NCS/LPG/10/2022.

The manufacturers in the free zones are also to enjoy other incentives that comply with regulatory procedures provided in OGFZA and NEPZA Regulations with respect to inspection of free zones containers without the knowledge of the Authorities, delay in the inspection of cargo, stoppage of cargo in transit and raising a query on importation of same as well as posting of customs officers to the free zones without the knowledge of the two Authorities.

Other recommendations of the six-point report included the stoppage of irregular invitations of Free Zone Enterprises to the customs headquarters on procedural matters that should be handled by the Area Controllers, including approval for local purchases, rents and hires in addition to the immediate integration of all Free Zone Enterprises into the IM5 (5900) customs operations portal and to redesign it to resolve the VAT implication for sales to the customs territory.

The committee further recommended the immediate formulation of Standard Operating Procedures (SOPs) and Procedure Codes for both Intra and Inter Zone Sales, Imports of vehicles, capital goods, spare parts, equipment, furniture and fixtures destined for consumption within the free zone, while the NCS is to allow the exports of finished and processed goods containing 100 per cent local raw materials with minimum stipulated VAT either mentioned in the Import Prohibition list of customs or in the 44 restricted lists of the Central Bank of Nigeria (CBN).

Finally, the committee recommended expeditious harmonization of all the areas of conflict contained in the legal frameworks of NCS, NEPZA and OGFZA respectively, according to Toyin Elegbede, the Chairman of the committee who assured prompt implementation of the committee’s report which is expected to reposition the scheme for greater economic impact.

“While I thank you, the Acting Comptroller-General of Customs, the Managing Directors/CEOs of NEPZA and OGFZA, on behalf of other members of the committee for the confidence reposed on us to carry out this assignment, please permit me to present the Report of the committee for your consideration,’’ Elegbede said.

Adesugba and Kaura lauded the genuine commitment of the new customs boss toward addressing all the listed conflict areas, noting that the two regulatory bodies and the entire free trade zones’ stakeholders through NEZA would scale up collaboration with the service to make the scheme more attractive.