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These incentives were announced by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, in a statement released on Wednesday.
As detailed in the statement from the Finance Ministry, which was signed by the Director of Information and Public Relations, Mohammed Manga, these measures aim to rejuvenate Nigeria's oil and gas sector.
Additionally, it was revealed that the importation of essential energy products and infrastructure—such as diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment—will be exempt from value-added tax.
Manga emphasized that this initiative is intended to establish Nigeria's deep offshore basin as a leading destination for international oil and gas investments, enhance energy security, and expedite the country's shift towards cleaner energy alternatives.
This policy announcement coincides with new divestment strategies from ExxonMobil and Seplat, which President Bola Tinubu indicated would receive ministerial approval shortly.
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 revitalising 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.”
Explaining 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 announcement regarding tax incentives for deep offshore oil and gas production outlines new tax relief measures for deep offshore initiatives, emphasizing that, “This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.”
The ministry announced that these fiscal incentives demonstrate the administration’s unwavering dedication to fostering sustainable growth, bolstering energy security, and propelling economic prosperity for all Nigerian citizens.
The statement added, “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.
“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,” the statement concluded.