Why FG Waived VAT On Cooking Gas, Diesel Imports

The Federal Government has announced new tax reliefs aimed at boosting investments in the deep offshore oil and gas sector. In addition, the government will no longer require value-added tax (VAT) on the importation of important energy products and infrastructure.

This includes diesel, feed gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), electric vehicles, Liquefied Natural Gas (LNG) infrastructure, and clean cooking equipment.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, made the announcement in a statement released on Wednesday. The statement, signed by Mohammed Manga, the Director of Information and Public Relations, indicated that these new initiatives would help make Nigeria’s deep offshore basin a leading choice for global oil and gas investments. The measures are also expected to enhance energy security and speed up Nigeria’s shift to cleaner energy sources.

This announcement comes at a time when ExxonMobil and Seplat are planning to divest, and President Bola Tinubu mentioned that these plans would receive ministerial approval soon. The statement read, “In its avowed determination towards ensuring a boost in the nation’s upstream and downstream sector, the Federal Government has introduced groundbreaking concessions aimed at revitalizing the industry.” It continued, “This is just as the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today unveiled two major fiscal incentives aimed at revitalizing Nigeria’s oil and gas sector: Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production.”

Manga explained that the VAT Modification Order 2024 will provide exemptions for a variety of essential energy products and infrastructure. He mentioned, “These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.” The notice of tax incentives for deep offshore oil and gas production will provide new tax reliefs for projects in that area. The statement emphasized that “this initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.”

The ministry noted that these fiscal incentives show the administration’s commitment to sustainable growth, improving energy security, and promoting economic prosperity for all Nigerians. The statement added, “These reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in line with Policy Directives 40-42.”

It concluded by saying that these initiatives will help Nigeria regain its status 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,” the statement said.

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