Price Cut Imminent as FG Removes VAT on Diesel, CNG, Electric Vehicles

The Federal Government has announced the removal of value-added tax (VAT) on a range of energy products, including diesel, Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG), and electric vehicles, as part of measures to lower costs and ease economic pressure.

This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, in a statement on Wednesday.

Edun explained that the VAT exemptions, outlined in the VAT Modification Order 2024, are aimed at reducing the cost of living, strengthening energy security, and accelerating Nigeria’s shift towards cleaner energy sources.

“The VAT Modification Order 2024 introduces exemptions on critical energy products and infrastructure, including diesel, feed gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), electric vehicles, Liquefied Natural Gas (LNG) infrastructure, and clean cooking equipment,” the statement read.

“These measures are designed to lower living costs, enhance energy security, and speed up Nigeria’s transition to cleaner energy,” Edun added.

Tax Incentives for Deep Offshore Oil & Gas Production

In a related development, Edun also announced new tax incentives for deep offshore oil operations and gas production, detailed in the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.

The goal of the initiative is to position Nigeria’s deep offshore basin as a prime destination for global oil and gas investments.

“These reforms are part of a broader set of investment-focused policy initiatives led by President Bola Ahmed Tinubu, in line with Policy Directives 40-42,” Edun noted.

He further emphasized that these steps reflect the government’s commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s competitiveness in the global oil and gas market.