The federal government has announced new tax breaks for deep offshore oil and gas production to encourage investment in the sector.
It also announced that imports of key 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, would no longer be subject to value-added tax.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made the announcement in a statement on Wednesday.
The statement signed by the Director of Information and Public Relations, Mohammed Manga, said the initiative would position Nigeria’s deep offshore basin as a premier destination for global oil and gas investments, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
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This policy directive comes as ExxonMobil and Seplat announce new divestment plans, which President Bola Tinubu says will be approved by ministers in the coming days.
The statement read, “In its avowed determination to boost the nation’s upstream and downstream sectors, the Federal Government has announced ground-breaking 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.”
Manga added, “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.”
It stated that the notice of tax incentives for deep offshore oil and gas production provides new tax breaks for deep offshore projects, 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 stated that these fiscal incentives reflect the administration’s unwavering commitment to promoting sustainable growth, improving energy security, and driving economic prosperity for all Nigerians.
The statement continued, “These reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in accordance with Policy Directives 40-42.”
“They demonstrate the administration’s strong commitment to fostering long-term growth in the energy sector and increasing Nigeria’s global competitiveness in oil and gas production.
“With these bold initiatives, Nigeria is on track to reclaim its leadership position in the global oil and gas market.
