Jessica Miller
Tue, Sep 12, 2023 10:10 PM

NARTO Urges Federal Government to Remove VAT on Diesel to Prevent Disruption of Petrol Distribution

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NARTO Urges Federal Government to Remove VAT on Diesel to Prevent Disruption of Petrol Distribution
The Nigerian Association of Road Transport Owners (NARTO) has called on the Federal Government to remove the 7.5% Value Added Tax (VAT) on Automotive Gas Oil (AGO), also known as diesel. NARTO warns that failure to remove the VAT would lead to disruptions in the distribution and supply of petrol (PMS). The high cost of diesel, coupled with the deplorable state of roads and skyrocketing dollar rate, has made the cost of doing business in the transport sector unbearable.

The Nigerian Association of Road Transport Owners (NARTO) has raised concerns over the high cost of Automotive Gas Oil (AGO), commonly known as diesel, and its impact on the distribution and supply of petrol. The association has urged the Federal Government to remove the 7.5% Value Added Tax (VAT) on diesel to alleviate the burden on transporters and prevent potential disruptions in petrol distribution.

NARTO, which represents haulage truck owners responsible for transporting about 90% of the nation's petrol, highlighted the soaring cost of AGO as a major challenge. Previously, the cost of diesel stood at around N600 per litre, but it has now surged to almost N1,000, significantly impacting the transportation costs of petrol.

According to Alhaji Yusuf Lawal Othman, the National President of NARTO, the combination of the high cost of diesel, the deplorable state of roads, and the skyrocketing dollar rate has created an unsustainable situation for transporters. The expense of purchasing spare parts and batteries for trucks has risen due to the increased cost of dollar exchange. Furthermore, the condition of the roads on which the trucks travel is in dire need of improvement.

While the government has fixed the pump price of petrol at N617 per litre, marketers are unable to increase the cost of transportation to compensate for the rising diesel costs. This predicament has left transporters in a difficult situation, as they are unable to maintain profitability without an adjustment in transportation fees.

Othman emphasized, "The instant intervention is the removal of 7.5% VAT on diesel because it is increasing the cost of diesel. The government has to look at that 7.5% increase in VAT on AGO because that is one of the reasons why AGO went up."

Additionally, NARTO highlighted the need for attention to the deplorable state of Nigerian roads. Othman pointed out specific road sections, such as Okpella to Lokoja and Agai to Bida to Kutugi, that urgently require repairs. The poor road conditions contribute to increased wear and tear on trucks, further adding to operational costs.

The removal of the VAT on diesel is crucial in stabilizing diesel prices and reducing the financial strain on haulage truck owners. NARTO's appeal for the government's intervention aims to prevent disruptions in the supply and distribution of petrol, ensuring the sustainability of the transportation sector.

In conclusion, the Nigerian Association of Road Transport Owners (NARTO) has urged the Federal Government to remove the 7.5% VAT on diesel to alleviate the burden on transporters and prevent potential disruptions in petrol distribution. The high cost of diesel, coupled with the deplorable state of roads and skyrocketing dollar rate, has made the cost of doing business in the transport sector unbearable. The government's intervention is required to address these challenges and ensure the smooth and efficient distribution of petrol throughout the country.

Source of content: OOO News 2023-09-12 News

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