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With the goal of tackling the persistent divestment challenges in the oil and gas sector, the Federal Government has implemented a new fiscal regime, featuring a wide scope of tax exemptions designed to foster greater investment and promote sustainable growth within the industry.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced through his Director of Information and Public Relations, Mr. Mohammed Manga, that the newly unveiled fiscal incentives aim to revitalize the nation’s oil and gas sector. The statement was made public earlier this evening.
The exemptions are formally detailed in the Value Added Tax (VAT) Modification Order 2024, alongside the Notice of Tax Incentives for Deep Offshore Oil and Gas Production, which is part of the broader Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
The VAT Modification Order 2024 outlines tax exemptions on a variety of key energy products and infrastructure, ranging from Diesel and Feed Gas to Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.
The Minister said concessions were expected to attract new and massive investments into the oil and gas and to revitalise the industry.
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He noted that these initiatives were aimed at easing the financial burden on citizens, enhancing the reliability of energy supplies, and speeding up Nigeria’s transition to environmentally friendly energy alternatives.
Mr. Edun voiced his belief that the initiative had the potential to reestablish Nigeria’s deep offshore basin as a prime target for international oil and gas investors, enhancing the country’s attractiveness in the global energy sector.
He explained that the reforms were a key component of a larger set of investment-focused policies introduced by President Bola Tinubu, aligning with the administration’s Policy Directives 40-42 to drive economic growth and attract foreign investment.
He said, “They reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.
“With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market. These fiscal incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians”
