The Federal Government has introduced new tax incentives aimed at boosting investment in deep offshore oil and gas production.
In addition, it announced that key energy imports, including diesel, feed gas, Liquefied Petroleum Gas, LPG, Compressed Natural Gas, CNG, electric vehicles, Liquefied Natural Gas, LNG, infrastructure, and clean cooking equipment, will no longer be subject to value-added tax, VAT.
This was revealed in a statement by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, on Wednesday, October 2.
The statement, signed by Mohammed Manga, Director of Information and Public Relations, emphasized that these measures would establish Nigeria’s deep offshore basin as a leading global destination for oil and gas investments, enhance energy security, and accelerate the country’s transition to cleaner energy sources.
The policy coincides with new divestment plans by ExxonMobil and Seplat, which, according to President Bola Tinubu, are expected to receive ministerial approval in the coming days.
The statement read, “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.
“This 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 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.”
Speaking further, Manga said, “The 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.
“These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”
The notice regarding tax incentives for deep offshore oil and gas production introduces new tax reliefs for these projects, with the goal of positioning Nigeria’s deep offshore basin as a top destination for global oil and gas investments.
According to the Ministry of Finance, these fiscal incentives underscore the administration’s strong commitment to fostering sustainable growth, strengthening energy security, and advancing economic prosperity for all Nigerians.
“These reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in line with Policy Directives 40-42,” the statement added.
“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.”
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