The Nigeria Customs Service (NCS) has introduced significant fiscal incentives to boost the domestic gas industry, including the removal of Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG).
These measures align with President Bola Ahmed Tinubu’s vision to enhance Nigeria’s investment climate and promote domestic gas utilization under the Presidential Gas for Growth Initiative.
In a statement on December 18, 2024, the NCS National Public Relations Officer, Mr. Abdullahi Maiwada, outlined the specifics of the policy changes:
Zero VAT: LPG, CNG, and related equipment, conversion services, and feed gas for processed gas are now zero-rated for VAT.
Zero Import Duty: Machinery, spare parts, and other components for gas utilization in Nigeria will attract no import duty.
To access these benefits, importers must obtain an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance and a support letter from the Office of the Special Adviser to the President on Energy.
The NCS also announced that all debit notes issued to petroleum marketers importing LPG under specific HS codes since August 26, 2019, would be withdrawn, ensuring past charges are rectified.
Growth in CNG Conversion Centres
Under the Presidential Compressed Natural Gas Initiative (P-CNGI), significant strides have been made in expanding CNG conversion centres nationwide. According to Michael Oluwagbemi, CEO of P-CNGI, the number of centres has increased to 170, with a target of reaching 200 by the end of December 2024.
“Before the end of this year, I promise that in the next two weeks, we will get to 200. We are already certifying at least an additional 35 to 40 centres,” Oluwagbemi said.
P-CNGI aims to establish 500 CNG conversion centres by 2025, doubling their initial projections. This expansion is expected to drive the adoption of CNG as an affordable and eco-friendly alternative to petrol.
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