Stakeholders in the oil and gas sector have called for the review of the zero per cent import duties on the importation of Liquefied Petroleum Gas (LPG) cylinders, to encourage local production.
The stakeholders, who spoke in seperate interviews with the News Agency of Nigeria (NAN) on the sidelines of the 2024 Nigeria Oil and Gas (NOG) conference in Abuja.
NAN reports that the conference is designed to encourage local content and grow the country’s Gross Domestic Product (GDP).
The stakeholders sought for 40 per cent upward review of import duties against the prevailing 20 per cent.
Mrs Nkechi Obi, Group Managing Director, Techno Oil Limited, urged the Federal Government to reverse the zero import duties placed on the importation of LPG cylinders and restore the initial 40 per cent, to discourage importation.
‘We need policy reversal on that to encourage local producers.
‘The unofficial explanation we are getting from some customs officers is that the Compressed Natural Gas (CNG), which the government
wants to encourage its usage in Nigeria, has the same Harmonised System (HS) code with LPG.
‘So, the import benefits placed on CNG equipment eventually affected LPG equipment; that is why they were tied together on the zero import duties.
‘Harmonised System codes are commonly used throughout the import and export process for the classification of goods.
‘For me, we don’t produce CNG cylinders in Nigeria because it involves advanced technology but we produce LPG cylinders here.
‘For us to produce CNG cylinders, we have to change one or two machines, and we expect the government to encourage us to upscale our technology to 32, which we are planning to do.’
Obi suggested for exemption LPG HS code from that of the CNG, adding this would make the importers of LPG to pay higher duties.
‘It will also enable the government to continue with its efforts to make CNG affordable in the country with zero import duties.
‘The previous government protected those producing cylinders, so that import will not overshadow l
ocal production; they did that to encourage local manufacturing but when this government came into existence, policy changed.
‘We only enjoyed that policy for six months before it was scrapped and replaced with the new zero import duties policy.
‘Definitely; we have to produce CNG cylinders and the government needs to consider those that will go into that production. But if government policy is killing LPG cylinder production that we are doing, it will be very difficult to enter into CNG cylinder production.
‘So, if there is anybody who can venture into CNG cylinder production, we the producers of LPG cylinders are here to do that and it is in our plan.
‘But we are not encouraged to do it because of what happened to us in the LPG cylinder production because of the frustrating policy that’s encouraging importation,’ Obi added.
An Economist, Dr Chijioke Ekechukwu, said that the government must be deliberate about building the economy.
‘In doing so, we should not be approbating and reprobating at the same
time.
‘There are companies in Nigeria manufacturing LPG cylinders and have the capacity to manufacture the quantities required.
‘Why do we create business and job opportunities for some foreign companies and countries and deny Nigerians these opportunities?
‘Our already scarce Forex will be utilised to import these cylinders and put more pressure on the exchange rate and external reserve, while local factories will be pushed out of business, with attendant job losses,’ Ekechukwu said.
He said that efforts should be geared towards encouraging local manufacturers of LPG cylinders, contribute to the growth of Nigeria’s.
Source: News Agency of Nigeria