Nigeria Customs Removes VAT, Import Duty on LPG and CNG as Part of Gas Expansion Initiative

Our reporter

The Nigeria Customs Service (NCS) has unveiled a significant policy shift aimed at boosting the country’s gas sector by removing the Value Added Tax (VAT) and import duties on Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG).

This new move is part of the government's broader strategy to enhance Nigeria’s investment climate and promote the widespread use of domestic gas resources.

 

In a statement released on Wednesday, December 18, the NCS's National Public Relations Officer, Mr. Abdullahi Maiwada, confirmed that LPG and CNG, along with their related equipment, will no longer be subject to VAT or import duties. This measure is expected to make these energy sources more affordable and accessible, further advancing the Presidential Gas for Growth Initiative.

 

The decision is in alignment with President Bola Ahmed Tinubu’s vision of increasing the domestic utilisation of gas while attracting further investments into the sector. As part of the initiative, the NCS outlined that machinery, equipment, and spare parts imported for gas utilisation in Nigeria will be exempt from import duties. This includes all items related to LPG and CNG, such as conversion kits and installation equipment.

 

“Pursuant to Part 1, Section 5 of the Customs and Excise Tariff Act, we are eliminating all duties on equipment related to gas utilisation," the statement explained. "This encompasses both LPG and CNG-related imports into Nigeria.”

 

Additionally, several gas-related items, including feed gas, CNG and LPG equipment components, and conversion and installation services, will now benefit from zero-rated VAT. This move is expected to provide a significant boost to the country’s gas infrastructure, particularly in the expansion of CNG and LPG initiatives across the nation.

 

Importers wishing to take advantage of these incentives will need to secure 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.

 

The NCS further clarified that LPG imports falling under specific Harmonized System (HS) Codes will also be exempt from both VAT and import duty. Consequently, all previous debit notes issued to petroleum marketers who imported LPG using these codes since August 26, 2019, will be revoked in line with the new policy.

 

This step marks a key part of Nigeria's broader efforts to diversify its energy mix and improve the affordability of clean energy alternatives like LPG and CNG for domestic use. It is also expected to stimulate growth within the country's gas sector by creating an enabling environment for both local and international investments.