Naira sales: LCCI looks forward to reality of NNPCL, Dangote, other refineries deal, okays exit of gas from VAT
by Tajudeen Balogun · The Eagle OnlineThe Lagos Chamber of Commerce and Industry has said it looks forward to the full implementation of Naira payments for crude oil sales to Dangote refinery and other local refineries.
LCCI said this in a press statement, on impacts of quick interventions, signed by its Director General, Dr Chinyere Almona, on Saturday.
Recall that the Nigeria National Petroleum Company Limited has scheduled sales of crude oil to local refineries starting from October 1, 2024.
The Chamber stated that this move will herald a significant milestone in Nigeria’s economic transformation, urging the government to sustain the political will to be consistent with the reforms in the oil and gas sector and implement the Petroleum Industry Act (PIA) fully.
Almona pointed out that the Chamber considers the long-term gains of “these reforms if they are implemented under a conducive regulatory environment”.
Away from this, LCCI commended the government’s latest policy decisions, declaring that removal of VAT on diesel and cooking gas is a bold step towards reducing the cost of living for Nigerians.
The Chamber affirmed that the new moves highlight some quick impact fiscal interventions that can ease the harsh economic conditions, under which businesses have hitherto struggled to survive.
However, Almona stated that the latest decision is just the beginning as the Chamber looks to the future, especially, transition to Compressed Natural Gas mobility, which offers an opportunity to make energy more affordable, reduce emissions, and create jobs.
LCCI acknowledged the significant step towards alleviating the burden on businesses and households by removing the Value-Added Tax (VAT) on diesel and cooking gas.
It affirmed that the move will provide immediate relief, especially as these commodities are essential to daily life and economic activities, adding that implementing the Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production are significant fiscal incentives that can revitalise Nigeria’s oil and gas sector.
Similarly, Almona recalled that for too long, the high cost of diesel has weighed heavily on the manufacturing sector, logistics, and transportation, while cooking gas, a cleaner and healthier alternative for households, has been made less affordable by VAT impositions.
“This policy shift will undoubtedly lower the operational costs for industries, reduce the overall cost of living for Nigerians, and increase home access to clean energy. The successful transition to CNG mobility definitely requires all the possible incentives to speed up the deployment. The tax reliefs for deep offshore oil and gas production could boost oil and gas sector investments” LCCI boss restated.
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While noting that the business community is upbeat about the government’s efforts towards transitioning to Compressed Natural Gas (CNG) as an alternative fuel for mobility, LCCI said to achieve the desired widespread adoption of CNG, it is critical to establish and expand the infrastructure for CNG refuelling stations across the country, noting that presently, access to CNG refuelling points is limited, and this it lamented, was creating a barrier to adoption.
LCCI recommends further: “The success of CNG mobility depends heavily on public acceptance and understanding of its benefits. A comprehensive awareness campaign should be launched to educate citizens and businesses on the cost advantages to individuals, cost savings for the government, and the positive environmental impact of CNG adoption.
“Transitioning to CNG requires vehicle modifications, which can be cost-prohibitive for individuals and small businesses. The government should consider creating incentives or subsidies for vehicle owners to convert their engines to run on CNG.
“The shift to CNG presents an opportunity for job creation in the energy and automotive sectors. We need programmes to equip existing mobility entrepreneurs like mechanics, road transport workers, and commercial bus drivers with the necessary skills for CNG-related jobs, from vehicle conversions to infrastructure maintenance and operation”.
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