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, to avert disruption in the distribution and supply of Premium Motor Spirit (PMS) petrol.
Diesel is the product for fueling about 90% of the haulage trucks which convey petrol from the depots to retail outlets nationwide. Prior to the placement of VAT on diesel, its cost was barely above N600/litre but it is now almost N1,000, which has also increased the cost of transporting PMS.Also, owing to the high cost of dollar exchange rate, it is expensive to purchase the spare parts of the trucks and batteries. NARTO National President, Alhaji Yusuf Lawal Othman, who made this known in a press statement issued in Abuja, added that despite the high operation cost, the government has stopped further increase in the pump price of PMS.He noted that since the marketers cannot raise their pump price, it is out of place to increase their cost of transportation.“The instant intervention is the removal of 7.5% VAT on diesel because the high cost of diesel is unbearable,” he said.He noted that unless the government urgently stops the 7.5% VAT on AGO, there will be shortage of supply of petrol because the transporters may park their trucks in the face of the unbearable cost of operation. He noted that the association, which is not proceeding on strike, is urging the government to immediately act to avert petrol supply disruption.