Nigeria’s Fiscal Incentives on Gas Utilisation: A Strategic Step Towards Energy Security and Economic Revitalisation Introduction In a decisive policy shift aimed at enhancing Nigeria’s investment attractiveness and catalysing a sustainable energy transition, the Federal Government—through the Nigeria Customs Service (NCS)—has announced the full implementation of zero import duty and VAT exemptions on key gas-related imports and services. This move, spearheaded by President Bola Ahmed Tinubu GCFR under the Presidential Gas for Growth Initiative, is aligned with Nigeria’s broader economic reform agenda to diversify energy sources, lower transportation and production costs, and reduce the nation's carbon footprint. Legal Backing and Institutional Framework The policy draws its authority from Part 1, Section 5 of the Customs and Excise Tariff Act, which grants the Federal Government the power to modify duties on goods in the national interest. Complementing this is the VAT (Modification) Order, pursuant to Section 38 of the Value Added Tax Act (as amended), which permits the Minister of Finance to exempt specific goods and services from VAT. These legal instruments provide the foundation for the following exemptions: 1. Import Duty Exemption (0%) All machinery, equipment, and spare parts imported exclusively for gas utilisation in Nigeria, especially for: Compressed Natural Gas (CNG) Liquefied Petroleum Gas (LPG) 2. VAT Zero-Rating The following goods and services are now zero-rated for VAT: Feed gas for processed gas Compressed Natural Gas (CNG) Imported Liquefied Petroleum Gas (LPG) Equipment components for CNG and LPG Conversion and installation services for CNG and LPG systems All equipment and infrastructure under the Presidential CNG Initiative Conversion kits and accessories Administrative Requirements for Beneficiaries To benefit from these fiscal incentives, importers must comply with the following conditions: Import Duty Exemption Certificate (IDEC): To be obtained from the Federal Ministry of Finance. Letter of Support: Must be issued by the Office of the Special Adviser to the President on Energy. These requirements are designed to ensure that only eligible participants engaged in genuine gas infrastructure expansion benefit from the scheme, thereby preventing abuse and revenue leakage. Special Relief on LPG Imports (Retrospective Application) One of the landmark provisions of this announcement is the retrospective waiver on import duty and VAT for LPG imported under HS Codes 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00, dating back to August 26, 2019. Consequently: All Debit Notes previously issued to petroleum marketers using these codes will be withdrawn by the NCS. This measure addresses longstanding complaints from industry players and enhances policy consistency and investor confidence. Implications for the Nigerian Economy and Gas Sector 1. Reduction in Cost of Living By eliminating import duty and VAT on critical gas-related inputs and services, end-user prices for CNG and LPG are expected to fall—especially in transportation and domestic cooking. This contributes directly to inflation control and household energy affordability. 2. Acceleration of Clean Energy Transition CNG and LPG are cleaner-burning alternatives to traditional fuels. By incentivising their adoption, the policy aligns with Nigeria’s commitments under the Paris Agreement and its Nationally Determined Contributions (NDCs). 3. Investment Attraction and Industrial Growth The tax incentives create a more favourable investment climate for local and foreign companies in the gas value chain—spanning production, infrastructure development, and service delivery. 4. Trade and Customs Efficiency By issuing clear exemptions and implementing retrospective reliefs, the NCS under Comptroller General Bashir Adewale Adeniyi MFR is demonstrating institutional responsiveness and policy continuity, which are crucial for ease of doing business. Call to Action for Stakeholders The NCS urges all stakeholders in the gas value chain—manufacturers, importers, logistics firms, and gas processors—to: Promptly apply for the relevant IDEC and letter of support. Comply with customs protocols to enjoy seamless implementation. Invest in infrastructure to localise gas processing and distribution. Conclusion The fiscal incentives announced under the Presidential Gas for Growth Initiative are more than just tax waivers—they are strategic economic tools to stimulate investment, drive clean energy adoption, and make Nigeria more competitive globally. With the implementation now underway, all eyes are on stakeholders to seize this opportunity and support the nation’s journey towards energy security, sustainability, and economic transformation. Olatunji Abdulrazaq CNA, ACTI, ACIArb(UK) Founder/CEO, Taxmobile.Online