Nigeria Exempts Diesel, LPG, Electric Vehicles From VAT, Boosts Offshore Oil Tax Breaks

The federal government has announced that key energy products and infrastructure, such as diesel, feed gas, liquefied petroleum gas, compressed natural gas, electric vehicles, liquefied natural gas infrastructure and clean cooking equipment, will no longer require value-added tax.

Furthermore, new tax reliefs for deep offshore oil and gas production have been introduced to encourage investment in this sector, Minister of Finance and Coordinating Minister of the Economy Wale Edun said Wednesday.

The minister noted this initiative aimed to make Nigeria's deep offshore basin a top choice for global oil and gas investments, improve energy security, and speed up Nigeria's shift to cleaner energy sources.

"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," he said, Punch reported.

Edun's statement, which was signed by the Director of Information and Public Relations, Mohammed Manga, also mentioned that the 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, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.

The measures were intended to lower the cost of living, improve energy security and help Nigeria transition to cleaner energy sources. The government explained that the tax incentives for deep offshore oil and gas production provide new tax reliefs for these projects.

This initiative aimed to make Nigeria's deep offshore basin a leading choice for global oil and gas investments. The ministry stated that the financial incentives showed the administration's strong commitment to promoting sustainable growth, enhancing energy security, and fostering economic prosperity for all Nigerians.

The statement added that these reforms were part of a larger set of investment-driven policy initiatives led by President Bola Tinubu, following Policy Directives 40-42.

The measures showed the administration's strong commitment to promoting sustainable growth in the energy sector and improving Nigeria's global competitiveness in oil and gas production. With these bold initiatives, Nigeria aimed to regain its status as a leader in the global oil and gas market.