The Federal Government has introduced new tax incentives to encourage investments in deep offshore oil and gas production. Additionally, key energy products such as diesel, feed gas, liquefied petroleum gas (LPG), compressed natural gas (CNG), electric vehicles, liquefied natural gas (LNG) infrastructure, and clean cooking equipment will now be exempt from value-added tax (VAT). This was announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in a statement released on Wednesday.
Signed by the Director of Information and Public Relations, Mohammed Manga, the statement highlights that these measures will enhance Nigeria’s position as a prime location for global oil and gas investments, strengthen energy security, and accelerate the country’s transition to cleaner energy sources.
The announcement coincides with divestment plans by ExxonMobil and Seplat, which are set to receive ministerial approval soon. In its effort to revitalize both the upstream and downstream sectors, the government introduced two key fiscal measures: the VAT Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production.
According to Manga, the VAT Modification Order 2024 includes tax exemptions for various essential energy products and infrastructure, aimed at reducing the cost of living, promoting energy security, and facilitating Nigeria’s shift toward cleaner energy solutions.
The new tax incentives for deep offshore oil and gas projects are designed to make Nigeria’s offshore basin more attractive for international investments. The ministry emphasized that these reforms reflect the government’s commitment to sustainable growth, economic prosperity, and energy security for Nigerians.
These changes are part of broader policy reforms spearheaded by President Bola Tinubu, outlined in Policy Directives 40-42, which aim to strengthen Nigeria’s competitiveness in the global oil and gas market. With these measures, Nigeria is set to reclaim its leadership role in the international oil and gas industry.
“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 concluded.
