…how 7.5% VAT pushed diesel price upward – Gas suppliers
The Federal Government says it will remove value-added tax (VAT) on diesel for the next six months.
This was disclosed by the Chief of Staff to President Tinubu, Femi Gbajabiamila as part of the waivers from the resolution reached between the Federal Government and leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) at the end of a four-hour meeting held at the State House on Sunday.
The meeting was held to discuss measures arising from the removal of fuel subsidy.
Here’s an excerpt of the official statement released by The Presidency following the meeting with NLC and TUC:
The Federal Government, on Sunday, October 1, 2023, met with the leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) on measures to address the dispute arising from the removal of subsidy on Premium Motor Spirit (PMS). The parties noted the following:
The Federal Government has announced N25,000 only as a provisional wage increment for all treasury-paid federal government workers for six months.
The Federal Government is committed to fast-tracking the provision of Compressed Natural Gas (CNG) buses to ease public transportation difficulties associated with the removal of PMS subsidy.
The Federal Government commits to the provision of funds for micro and small-scale enterprises.
VAT on diesel will be waived for the next 6 months.
Increase in Diesel price
The National Bureau of Statistics disclosed in its monthly inflation data that the average retail price of Automotive Gas Oil (Diesel) increased by 8.57%.
In August 2023, consumers were paying, on average, N854.32 per litre, compared to the lower cost of N786.88 per litre recorded in the same month of the previous year.
7.5% VAT
President of the Natural Oil and Gas Suppliers Association of Nigeria, Bennett Korie had said that the 7.5% value-added tax (VAT) on diesel has pushed pump prices to N900 at the least and N950 at the maximum across Nigeria.
Korie stated that the challenges with forex, as well as the 7.5% VAT on diesel, have pushed prices from N650 per litre to over N900 per litre.
According to him, “Diesel price is now approaching N900 to N950/litre depending on where you are buying it from. Before the introduction of VAT on diesel by the FIRS, diesel was around N650/litre.”
