FG Halts VAT on Diesel and Cooking Gas

The Federal Government has announced new tax reliefs for deep offshore oil and gas production aimed at boosting investments in the sector.

Additionally, it was stated that the importation of key energy products and infrastructure—including diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment—will no longer incur value-added tax.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, made this announcement in a statement on Wednesday.

The statement, signed by the Director of Information and Public Relations, Mohammed Manga, noted that the initiative is intended to position Nigeria’s deep offshore basin as a leading destination for global oil and gas investments, enhance energy security, and accelerate the country’s transition to cleaner energy sources.

This policy directive coincides with new divestment plans from ExxonMobil and Seplat, which President Bola Tinubu stated would receive ministerial approval in the coming days.

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.

“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 revitalising Nigeria’s oil and gas sector: Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.”

Explaining further, Manga said, “The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment.