The Federal Government has announced the removal of Value Added Tax (VAT) on diesel and cooking gas, among other products, as part of new fiscal incentives aimed at revitalizing Nigeria’s oil and gas sector.
Finance Minister Wale Edun disclosed these measures on Wednesday, unveiling the VAT modification order for 2024 and a notice of tax incentives for deep offshore oil and gas production.
These initiatives align with the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024, as stated by Mohammed Manga, Director of Information and Public Relations at the Ministry of Finance.
The statement said: “The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
“In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.
This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
“These reforms are part of a broader series of investment-driven policy initiatives championed by His Excellency, President Bola Ahmed Tinubu, in line with Policy Directives 40-42.
They reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.”
Manga added: “With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market.
“These fiscal incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.”
