The Nigerian government has made a significant decision to remove the Value-Added Tax (VAT) on several energy products, including cooking gas (Liquefied Petroleum Gas), Compressed Natural Gas (CNG), and diesel (Automotive Gas Oil). This step aims to reduce the high cost of living and attract more investments in the energy sector.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, shared this update on Wednesday. According to a statement signed by Mohammed Manga, Director of Information and Public Relations, the government believes these tax cuts will help ease the economic struggles Nigerians are currently experiencing.

The VAT relief not only applies to cooking gas, CNG, and diesel but also extends to important energy imports and infrastructure. Items like electric vehicles, feed gas, Liquefied Natural Gas (LNG) infrastructure, and clean cooking equipment are now exempt from VAT. This move is designed to lower energy costs and promote the use of cleaner energy sources across the country.

Moreover, the government has introduced new tax incentives for deep offshore oil and gas production. This initiative aims to encourage global investors to look at Nigeria’s offshore basin as a top destination for oil and gas investments.

These changes come at a time when many Nigerians are feeling the pressure of rising living expenses, driven by an inflation rate of 32.15% in August 2024. The removal of VAT on these key energy products is expected to provide some relief, helping families and businesses cope with the economic challenges they are facing while promoting long-term energy security.

The government’s effort to boost the energy sector through VAT removal and tax incentives is a welcome step in alleviating the financial burden on Nigerians while also supporting the country’s transition to cleaner energy.