Market News

N1,000/litre diesel price unchanged despite VAT removal – Marketers - PUNCH

OCTOBER 03, 2023

BY  Okechukwu Nnodim and OpeOluwani Akintayo

Oil marketers, on Monday, said the cost of Automotive Gas Oil, popularly called diesel, was still over N1,000/litre despite the announcement of the Federal Government that it had removed Value Added Tax on the commodity.

It was gathered that the cost of AGO was still between N990 and N1,100/litre on Monday, though many filling stations lacked the product, as they blamed this on the high price of diesel.

Dealers of the commodity told our correspondent that they were aware of the decision of the government to remove VAT on diesel, but they described it as “just an announcement for now.”

The Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, said, “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 to N1,100/litre, depending on where you are getting it from.

“So it is just an announcement for now. We await its implementation. However, I must say that implementation may start from tomorrow since today is public holiday.”

Reacting to the directive after the Federal Government met with the leadership of the Nigerian Labour Congress and the Trade Union Congress on the Independence Day, Chairman Satellite Depot, the Independent Petroleum Marketers Association of Nigeria, Akin Akinrinade told The PUNCH on Monday, that prices of diesel would still not reduce until a new directives was issued from the regulator of the downstream sector, the Nigerian Midstream and Downstream Petroleum Regulatory Authority to the effect.

Akinrinade said, “It is a little relief; however, the directive was just a mere policy statement by the president. NMDPRA would still have to issue a memo to that effect before there can be a reduction in prices.

“And don’t forget, we buy from the depots. So, let us see how much they would sell to us first once new stocks start coming in. For now, we still have old stock that would be sold at an old price. We would need to sell off our old stock before we start buying new products. This implies that there won’t be an immediate drop in price until we finish selling the old stock and new products start coming into the country; and that could take as long as the next three weeks.”

National Controller Operations, IPMAN, also described FG’s directive as “a relief”.

“That is one of the interventions promised by President Tinubu. It is a relief because at least, prices would begin to come down once new products start coming into the depots.”

The spokesperson for the Major Oil Marketers Association of Nigeria, Clement Isong declined commenting on the development.

On June 20, 2023, The PUNCH exclusively reported that the Federal Government confirmed that it had commenced the implementation of the payment of 7.5 per cent VAT on diesel.

Officials of the Nigeria Customs Service and Federal Inland Revenue Service had confirmed this, as they stressed that diesel was not exempted from the payment of VAT based on the VAT Modification Order 2021.

But on Sunday, the Federal Government announced that it had waived VAT on diesel for six months.

The Minister of Information and National Orientation, Mohammed Idris, announced this in a statement after a meeting between government officials and labour unions over the latter’s planned industrial action.

“VAT on diesel will be waived for the next six months,” the minister stated, noting that it was part of the resolutions reached during the meeting with organised labour in Abuja.


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