Diesel remains N1000 per litre despite VAT removal – Marketers

Bisola David
Bisola David
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Oil marketers claimed on Monday that despite the federal government’s statement that it has abolished the value-added tax on the product, the price of automotive gas oil, also known as diesel, was still more than N1,000 per litre.

According to The Punch, AGO was said to still cost between N990 and N1,100 per litre on Monday, despite the fact that many petrol stations were reported to be out of the product and blaming it on the high cost of fuel.

Dealers of the product informed our correspondent that they were aware of the government’s plan to abolish the VAT on diesel, but they noted that it was “just an announcement for the time being.”

“Yes, we heard the announcement yesterday (Sunday) that VAT on diesel has been removed, but as I speak with you, the cost of diesel is still between N990 and N1,100/litre, depending on where you are getting it from,” said Mohammed Shuaibu, Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja.

“So for now, it’s simply an announcement. We anticipate its application. However, given that Monday is a holiday, I must state that implementation might begin tomorrow.”

According to Akin Akinrinade of the Independent Petroleum Marketers Association of Nigeria, diesel prices won’t come down until new instructions are given to that effect by the organisation that oversees the downstream industry, the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

“And keep in mind that we purchase from depots. So, as fresh stocks begin to arrive, let’s first see how much they would sell to us. We currently still have outdated inventory that would be priced accordingly.

“Before we begin acquiring new products, we would need to sell off our current inventory. This suggests that there won’t be a price decrease right away until the old stock has been sold off and the new products have arrived in the country, which may take up to the next three weeks.

The FG’s instruction was referred to by IPMAN, the National Controller Operations, as “a relief”.

“That’s one of the interventions President Tinubu promised. It is a comfort because as fresh products start arriving at the depots, prices should start to drop.

Clement Isong, a spokesman for the Major Oil Marketers Association of Nigeria, declined to comment on the situation.

The Federal Government acknowledged that it has started implementing the payment of the 7.5% VAT on diesel on June 20, 2023.

This was confirmed by representatives of the Federal Inland Revenue Service and Nigerian Customs Service, who made it clear that the VAT Modification Order 2021 did not exclude fuel from paying VAT.

However, the Federal Government declared on Sunday that it removed the VAT on diesel for a period of six months.

Following a meeting between government representatives and labour unions on the latter’s planned industrial action, the Minister of Information and National Orientation, Mohammed Idris, made this announcement in a statement.

The Minister said, “VAT on diesel will be waived for the next six months.” He noted that it was part of the resolutions reached during the meeting with organised labour in Abuja.

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