In response to growing concerns voiced by the LPG Marketers Association, the National Petroleum Authority (NPA) has assured steadfast support to ease operational costs for Liquefied Petroleum Gas (LPG) traders.
The contentious issue under discussion pertains to the proposed imposition of an $80 per metric ton (MT) levy on suppliers’ premiums, aimed at enhancing investments in bottling plants and cylinder margins.
Abass Ibrahim Tasunti, Head of Economic Regulation at the NPA, reaffirmed the authority’s proactive stance in tackling industry challenges to ensure sustained viability.
Mr. Tasunti delineated the NPA’s comprehensive strategy, which incorporates regulatory directives and innovative measures to alleviate the financial burden on stakeholders.
“While taxes are indispensable for government revenue, we recognize the imperative of striking a delicate balance. In light of this, we have advocated for a reevaluation of the tax burden on LPG,” stated Mr. Tasunti.
He expanded on collaborative efforts between the NPA and bulk distribution companies (BDCs) to streamline importation processes and lower related expenses.
“Our dialogue with BDCs has paved the way for exploring alternative procurement avenues. Through consolidating quantities and conducting transparent competitive tenders, we have successfully negotiated premiums, significantly trimming costs. The introduction of the $80 per metric ton levy complements this endeavor, fostering a more sustainable pricing framework,” Mr. Tasunti explained.
The NPA’s proactive interventions have yielded tangible outcomes, as evidenced by a remarkable reduction in premiums from $100 to $30 per metric ton.
Mr. Tasunti underscored the positive ripple effect of this initiative on the overall LPG importation cost structure, highlighting its pivotal role in adapting to pricing fluctuations.