The Nigeria Customs Service (NCS) has announced the removal of Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG), also known as cooking gas, and Compressed Natural Gas (CNG). Additionally, the service has introduced zero per cent import duty on these products.
This decision is in line with President Bola Ahmed Tinubu’s commitment to improving Nigeria’s investment climate and increasing domestic gas utilization.
The announcement was made by the NCS’s National Public Relations Officer, Mr. Abdullahi Maiwada, in a statement issued on Wednesday.
In the statement, the NCS explained that, under the Presidential Gas for Growth Initiative, fiscal incentives were being introduced to support the gas sector.
According to Part 1, Section 5 of the Customs and Excise Tariff Act, machinery, equipment, and spare parts imported for Nigerian gas utilization will now be subject to a zero per cent import duty rate. This exemption covers all equipment related to both Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) imported into Nigeria.
Furthermore, the following items are now exempted from VAT: feed gas for all processed gas, Compressed Natural Gas, imported Liquefied Petroleum Gas, CNG equipment components, conversion and installation services, LPG equipment components, and all equipment and infrastructure related to the expansion of CNG and LPG, including conversion kits.
The NCS also highlighted that importers who wish to benefit from these incentives must obtain an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance and a letter of support from the Office of the Special Adviser to the President on Energy.
Additionally, the NCS clarified that importation of LPG under HS Codes 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00 is exempted from both Import Duty and VAT.
The Customs service also stated that all Debit Notes issued to petroleum marketers who have imported LPG under these codes from August 26, 2019, to the present will be withdrawn in line with prior approvals.
Meanwhile, the Presidential Compressed Natural Gas Initiative (P-CNGI) expressed optimism about its progress. The initiative, which aims to expand the use of CNG in the country, has seen the establishment of 170 CNG conversion centres across Nigeria.
Michael Oluwagbemi, the CEO of P-CNGI, confirmed that this number would increase to 200 by the end of the year, doubling their target. He added that the initiative plans to expand to 500 conversion centres in the coming year.
Oluwagbemi also emphasized the success of the initiative in meeting its targets, noting that the goal for this time last year was 100 centres, but they had exceeded this figure.
The P-CNGI aims to continue growing the number of CNG conversion centres to further reduce fuel dependency and promote the use of natural gas as a cleaner, alternative energy source.
