The Federal Government has announced the removal of Value Added Tax (VAT) on diesel and cooking gas.
This decision was revealed by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
The announcement was made during a press conference where Edun unveiled two major fiscal incentives aimed at revitalising Nigeria’s oil and gas sector.
The new measures include the VAT Modification Order 2024 and a notice of tax incentives for deep offshore oil and gas production.
According to a statement from Mohammed Manga, Director of Information and Public Relations at the Ministry of Finance, these incentives are designed to lower living costs, enhance energy security, and promote cleaner energy sources in Nigeria.
“The VAT Modification Order 2024 introduces exemptions on key energy products such as Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), and Compressed Natural Gas (CNG),” Manga explained.
In addition to this, the government is also providing tax reliefs for deep offshore oil projects.
This aims to make Nigeria’s deep offshore basin an attractive destination for global oil and gas investments.
The removal of VAT on these essential products comes as Nigeria grapples with rising living costs and energy shortages.
Government officials believe that this move will provide much-needed relief to Nigerians who rely on these energy sources.
Edun stated, “With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market.”
He emphasised that these measures reflect the administration’s commitment to sustainable growth in the energy sector.
The decision is expected to have a direct impact on the lives of Nigerians.
By removing VAT on diesel and cooking gas, the government aims to reduce prices for consumers.
For many households, cooking gas is a primary source of energy for daily meals.
Diesel is also essential for various sectors, including transportation and agriculture.
Reducing the cost of these products can help alleviate financial pressure on families.
These fiscal incentives are part of a broader strategy by President Bola Ahmed Tinubu’s administration.
The government aims to enhance Nigeria’s global competitiveness in oil and gas production.
Manga noted that these initiatives align with the Policy Directives 40-42, which focus on driving investment in the energy sector.
This move is also seen as a response to the challenges posed by global energy markets and the need for Nigeria to adapt.
Experts believe that these reforms could position Nigeria as a more attractive option for foreign investors.
