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Tariff ambiguities delay conversion and sale of natural gas cars, according to workshops

Tariff ambiguities delay conversion and sale of natural gas cars, according to workshops

The Association of Conversion Workshops to Natural Gas Vehicles (NGV) and Liquefied Petroleum Gas (LPG) of Peru requested the repeal of some tariff items of DS 181-2019 EF which, in its opinion, generates distortions in the market and “a excessive preference for LPG”.

The head of the organization, Edson Vílchez, maintained that the “ambiguity” and “lack of clear distinction” between LPG and NGV within the regulations constitutes a perverse incentive for the import of the former of these fuels (30% of the national demand) and results in “significant losses for the national treasury”.

As a result of this lack of clarity in the tariff items, there has been a “worrying trend of vehicle sales companies to install LPG equipment in a ratio of 4 to 1 with respect to CNG.”

The Association warns that, in addition, national LPG reserves will be exhausted in 7 to 8 years, as predicted by Minem, “which would make Peru a 100% net importer of this gas, while the country has proven reserves of CNG for the next 20 years”.

The problem also degenerates into a system by which vehicle importing and distributing companies charge the buyer for the installation of gas equipment and then request the State to refund the Selective Consumption Tax (ISC), “resulting in a double charge.” .

It should be noted that the increase in the price of LPG has been more than 500% in recent years, in contrast to a modest increase of S/0.70 in the price of NGV in 18 years.

“Not only does it increase State expenses, by needing to import 300,000 additional barrels of LPG each year, but it also hinders the achievement of energy sovereignty and puts at risk the strategy of mass use of natural gas,” he highlighted.

Source: Larepublica

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