Diesel Price Remains Unchanged Despite Govt’s Decision To Remove VAT, Say Marketers

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has stated that the price of Automotive Gas Oil, commonly known as diesel, has not changed despite the federal government's decision to remove the Value Added Tax (VAT) on it.

IPMAN's Secretary, Mohammed Shuaibu, acknowledged the government's Monday announcement about removing VAT on diesel but noted that the "cost of diesel is still between N990 to N1,100/liter, depending on where you are getting it from."

"So, it is just an announcement for now. We await its implementation," he said, adding, "However, I must say that implementation may start from tomorrow since today is a public holiday."

Akin Akinrinade, who serves as Chairman of Satellite Depot, said that the diesel prices won't reduce until the regulator issues new directives to the downstream sector, the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

He noted that this announcement is a relief, however, these are just policy statements by the president, and they won't come into effect immediately. "NMDPRA would still have to issue a memo to that effect before there can be a reduction in prices," Akinrinade added.

He went on to share that the IPMAN still purchases from depots, and they are going to sell at the old cost as they still have the old stock.

"We would need to sell off our old stock before we start buying new products," he said, adding, "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 of IPMAN called President Bola Ahmed Tinubu's interventions a "relief" because the price will start coming down after new products are added to the depots.

On Sunday, the Nigerian government announced the removal of VAT from diesel for the next six months to lower the impact of subsidy removal that increased the cost of fuel and food across the nation.

Mohammed Idris Malagi, Minister of Information and National Orientation of Nigeria, said after Tinubu addressed Nigeria on the 63rd Independence Anniversary that "VAT on diesel will be waived for the next six months."

The federal government confirmed in June that a 7.5 percent VAT on diesel has been implemented. Whereas, the fuel subsidy removal announcement was made on May 29. Aside from hiked fuel and food costs due to subsidy removal, cab services like Uber also increased the prices in June.

Last month, Tinubu acknowledged the hardship Nigeria is going through, assuring that with "patience and determination," Nigeria will succeed.