The Nigeria Customs Service (NCS) has announced major tax relief measures to boost the country’s domestic gas industry. These include the removal of Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG), as well as zero import duties on gas-related equipment and machinery.
This move aligns with President Bola Ahmed Tinubu’s “Presidential Gas for Growth Initiative,” which aims to encourage investment in the gas sector and promote the use of cleaner energy sources across Nigeria.
Details of the Policy
On 18 December 2024, NCS Public Relations Officer Abdullahi Maiwada shared the specifics:
- Zero VAT: No VAT will be charged on LPG, CNG, feed gas for processing, conversion services, and related equipment.
- Zero Import Duty: Gas-related machinery, spare parts, and other components will now be exempt from import duties.
However, to access these incentives, importers must secure an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance and a letter of support from the Special Adviser to the President on Energy.
Additionally, the NCS has announced that debit notes issued to LPG importers under certain customs codes since August 2019 will be cancelled. This adjustment will refund or erase past charges on eligible transactions.
Growth of CNG Conversion Centres
The Presidential Compressed Natural Gas Initiative (P-CNGI) has been making significant progress in expanding CNG conversion centres across the country. Michael Oluwagbemi, CEO of P-CNGI, revealed that 170 centres are currently operational, with plans to reach 200 by the end of 2024.
“We’re certifying another 35 to 40 centres within the next two weeks. By the end of this year, we’ll hit our target,” Oluwagbemi stated.
Looking ahead, the initiative plans to establish 500 centres by 2025, doubling earlier projections. This growth is expected to make CNG a more accessible and affordable alternative to petrol, while also reducing environmental pollution.
What This Means for Nigerians
These policy changes are expected to lower the cost of cooking gas and promote the adoption of cleaner, more affordable energy sources like CNG. By eliminating taxes and duties, the government aims to attract investment into the gas sector and encourage a shift away from petrol dependency.
The reforms are a step forward in Nigeria’s efforts to harness its vast gas reserves, support economic growth, and meet global clean energy targets.