Govt weighs up cut in LPG import duty
Friday, 26 March 2010
M Azizur Rahman
The government is weighing up a cut in duties and taxes on import of liquefied petroleum gas (LPG) and cylinders to boost import and expansion of its use to alleviate the mounting gas crisis, officials said Tuesday.
The energy ministry has sent a proposal to the National Board of Revenue (NBR) to cut import duty and taxes on import of LPG and its cylinder to ensure that they become cheaper in the local market, a senior energy ministry official told the FE.
The ministry's request to the NBR followed pleas from the private sector LPG importers, he said.
Currently the private importers have to pay 24 per cent import duty, 5.0 per cent customs duty, 15 per cent value added tax, 3.0 per cent advance income tax (AIT) and 1.0 per cent pre-shipment inspection (PSI) charge - to import LPG cylinders, market insiders said.
While importing LPG, the import duty comes to 9.0 per cent, which includes 5.0 per cent customs duty, 3.0 per cent AIT and 1.0 per cent PSI charge.
The energy ministry earlier asked the country's private entrepreneurs to rev up LPG imports to augment its use as an alternative to piped natural gas, especially in households and light engineering workshops.
But the private entrepreneurs have urged the government to slash import duties on LPG and cylinders to reduce costs.
They also demanded framing of an optimum energy pricing policy to ensure fair prices of energy products including piped natural gas, LPG etc.
Currently the country consumes around 100,000 tonnes of LPG every year, mostly by the urban people in district towns and light engineering workshops.
The state-owned LPG producer supplies 20 per cent of the market need and private players import the remaining 80 per cent.
LPG marketing in Bangladesh was pioneered by state-owned Bangladesh Petroleum Corporation ( BPC) in the late 1970s, but with the growth of demand in the mid-1990s the government opened up LPG imports and permitted private entrepreneurs to invest in LPG import, storage and bottling facilities.
Anticipating huge LPG market in the country, several multinationals including leading local companies came forward and made investments in the import facilities, storage tanks and bottling plants during 1999 and 2001.
The government is weighing up a cut in duties and taxes on import of liquefied petroleum gas (LPG) and cylinders to boost import and expansion of its use to alleviate the mounting gas crisis, officials said Tuesday.
The energy ministry has sent a proposal to the National Board of Revenue (NBR) to cut import duty and taxes on import of LPG and its cylinder to ensure that they become cheaper in the local market, a senior energy ministry official told the FE.
The ministry's request to the NBR followed pleas from the private sector LPG importers, he said.
Currently the private importers have to pay 24 per cent import duty, 5.0 per cent customs duty, 15 per cent value added tax, 3.0 per cent advance income tax (AIT) and 1.0 per cent pre-shipment inspection (PSI) charge - to import LPG cylinders, market insiders said.
While importing LPG, the import duty comes to 9.0 per cent, which includes 5.0 per cent customs duty, 3.0 per cent AIT and 1.0 per cent PSI charge.
The energy ministry earlier asked the country's private entrepreneurs to rev up LPG imports to augment its use as an alternative to piped natural gas, especially in households and light engineering workshops.
But the private entrepreneurs have urged the government to slash import duties on LPG and cylinders to reduce costs.
They also demanded framing of an optimum energy pricing policy to ensure fair prices of energy products including piped natural gas, LPG etc.
Currently the country consumes around 100,000 tonnes of LPG every year, mostly by the urban people in district towns and light engineering workshops.
The state-owned LPG producer supplies 20 per cent of the market need and private players import the remaining 80 per cent.
LPG marketing in Bangladesh was pioneered by state-owned Bangladesh Petroleum Corporation ( BPC) in the late 1970s, but with the growth of demand in the mid-1990s the government opened up LPG imports and permitted private entrepreneurs to invest in LPG import, storage and bottling facilities.
Anticipating huge LPG market in the country, several multinationals including leading local companies came forward and made investments in the import facilities, storage tanks and bottling plants during 1999 and 2001.