Reinstate 40% import duties on LPG cylinders, Operator urges FG

One of the operators in the oil and gas sector, the Group Managing Director (GMD) of Techno Oil Limited, Mrs Nkechi Obi, has urged the Federal Government to reinstate 40 per cent import duties on Liquefied Petroleum Gas (LPG) cylinders.

She also urged the central authority to reverse its policies on the importation of Compressed Natural Gas (CNG) and LPG cylinders.

Obi made this appeal known during a panel session at the 2024 Nigeria Oil and Gas (NOG) conference in Abuja.

Speaking, Obi pleaded with the government to reverse the zero import duties placed on the importation of LPG cylinders and restore the initial 40 per cent import duties, to discourage importation.

According to her, such a policy reverser on LPG cylinders would encourage local producers.

Techno Oil is one of the leading operators in the LPG market in Africa boasting of 5 million annual capacity LPG cylinder manufacturing plant, an 8400mt LPG storage terminal and a 1000mt LPG bottling plant.

She said: “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,” she lamented.

Obi also called on the Federal Government to separate the LPG HS code from that of CNG, to ensure that importers of LPG pay higher import duties, and to 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 local 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 is encouraging its importation,” Obi added.

Source: Nigeria Tribune