It’s no longer news that the current Value Added Tax, VAT rate in the country by the Finance Act 2019 had been upwardly reviewed to 7.5% across sectors. What seems to be news is the recent introduction of this rate on imported Liquefied Petroleum Gas, popularly known as cooking gas.

This move implemented three weeks ago has not come without its peculiarity as it has contributed to a skyrocketing pattern of the product, reaching an over 100 percent increase in eight months. It has been learnt that a contributing factor to the increment as gathered from stakeholders is a result of the mandatory payment for some dealers to pay the tax for commodities imported several months ago.


Nigeria as an import-dependent nation, imports about 70 percent of the commodity into the nation while the rest is supplied by the Nigeria Liquefied Natural Gas company, hence the massive impact of the new tax that focuses on the importation of this commodity.

The skyrocketing pattern and projection

Regardless of the current increase of cooking gas across the nation, dealers of the commodity are predicting an over-the-roof increase in price by December 2021. They project that filling 12.5kg of cooking gas that was sold for about ₦3,500 in December 2020 may go for ₦10,000 by the end of 2021.

The three reasons for exportation have been put as insufficient local production, the rise of petroleum products at the international scene, and the introduction of VAT on its importation.

Rationale for increase

The Liquefied Petroleum Gas Retailers Association of Nigeria through its national chairman in a recent update explained that the increase in prices of this commodity is due to the heavy importation of the product with the current insufficient local production.

Also, the rise in the price of petroleum products in the international market and the recent inclusion of the new VAT rate by the Federal Government further exacerbated the price hike of cooking gas in the past three weeks.

As a sustainable solution, dealers in the industry want the production capacity of the NLNG to increase so that local production is sufficient to serve the Nigerian market.

What you should know

  • The cost of the commodity in metric tonnes has gone up, causing 20 Metric Tonnes to go from about 6.8 million to 8 million.
  • VAT had been canceled on the commodity until it was re-introduced 3 weeks ago.
  • Experts in the industry predict an upsurge in the use of cooking gas.
Please follow and like us:

Leave a Reply

Your email address will not be published. Required fields are marked *