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Prices of Diesel, Gas, Others to Fall as FG Suspends VAT

By Adedapo Adesanya

The federal government has introduced new fiscal incentives to boost foreign investments in Nigeriaโ€™s oil and gas sector.

The two incentives were unveiled by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, according to a statement on Wednesday.

In the notice signed by the Director of Information and Public Relations in the Finance Ministry, Mr Mohammed Manga, the incentives are aimed at revitalising the countryโ€™s energy climate.

It also announced 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 would no longer require value-added tax payment.

It said the initiative would position Nigeriaโ€™s deep offshore basin as a premier destination for global oil and gas investments, bolster energy security, and accelerate Nigeriaโ€™s transition to cleaner energy sources.

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

The statement read, โ€œIn its avowed determination towards ensuring a boost in the nationโ€™s upstream and downstream sector, the Federal Government has introduced groundbreaking concessions aimed at revitalising the industry.

โ€œThis 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 Nigeriaโ€™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.โ€

โ€œThe 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.

โ€œThese measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeriaโ€™s transition to cleaner energy sources.โ€

It explained that the notice of tax incentives for deep offshore oil & gas production provides new tax reliefs for deep offshore projects, stressing that, โ€œThis initiative is aimed at positioning Nigeriaโ€™s deep offshore basin as a premier destination for global oil and gas investments.โ€

The ministry said these fiscal incentives reflect the administrationโ€™s steadfast commitment to promoting sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.

The statement added, โ€œThese reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in line with Policy Directives 40-42.

โ€œThey reflect the administrationโ€™s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeriaโ€™s global competitiveness in oil and gas production.

โ€œWith these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market.

โ€œThese fiscal incentives demonstrate the administrationโ€™s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians,โ€ the statement concluded.