Nigeria’s Oil and Gas Sector Gets Boost from New Fiscal Incentives
In a move aimed at revitalizing Nigeria’s oil and gas sector, the Federal Government has introduced two new fiscal incentives. The incentives, unveiled by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, are designed to boost foreign investments in the sector.
The first incentive is the Value Added Tax Modification Order 2024, which exempts a range of key energy products and infrastructure from value-added tax payment. These products and infrastructure include diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment. This measure is expected to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
The second incentive is the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, which provides new tax reliefs for deep offshore projects. This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
The fiscal incentives reflect the administration’s commitment to promoting sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians. They are part of a broader series of investment-driven policy initiatives championed by President Bola Tinubu, in line with Policy Directives 40-42.
The announcement of these incentives comes alongside new divestment plans from ExxonMobil and Seplat, which President Tinubu said would receive ministerial approval in the coming days. This policy directive is expected to boost Nigeria’s 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.
With these incentives in place, Nigeria is poised to become a more attractive destination for foreign investments in the oil and gas sector, paving the way for sustainable growth and development.
