Price of diesel unchanged despite removal of VAT

The cost of Automotive Gas Oil (AGO) popularly known as diesel has continued to hover around N990 and N1,100 despite the removal of Value Added Tax (VAT) on the product, oil marketers have said.

Ripples Nigeria reports that the Federal Government had waived VAT on diesel for the next six months as part of a deal with organised labour to avert the planned nationwide indefinite strike action by workers in the country.

Checks around filling stations across the country showed that diesel still sold for between N990 and N1,100/litre on Monday.

According to marketers, though they were aware of the decision of the government to remove VAT on diesel, they described it as “just an announcement for now.”

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The Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN) 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 tomorrow since today is a public holiday.”

Also speaking on the development, the Chairman Satellite Depot of IPMAN, Akin Akinrinade, said in an interview with The Punch that prices of diesel would still not reduce until a new directive was issued from the regulator of the downstream sector, the Nigerian Midstream and Downstream Petroleum Regulatory Authority to the effect.

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He 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.”