The Nigeria Customs Service (NCS) has introduced a zero percent import duty on equipment for Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) as part of the government’s efforts to boost the country’s energy sector and promote cleaner energy sources.
This decision, announced on Wednesday, aligns with President Bola Tinubu’s objective to enhance the investment climate and increase domestic gas usage.
Under the new policy, machinery, equipment, and spare parts imported for gas utilization in Nigeria will no longer attract import duties. This exemption applies to all equipment related to CNG and LPG. In addition, certain items have been zero-rated for Value Added Tax (VAT), including feed gas for processed gas, CNG, LPG, and their respective equipment components, as well as conversion and installation services.
The NCS also highlighted that the exemption covers equipment and infrastructure linked to the expansion of CNG, LPG, and the Presidential CNG Initiative, including conversion kits. Importers who wish to take advantage of this incentive are required to 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 LPG imported under specific Harmonized System (HS) codes (2711.12.00.00, 2711.13.00.00, and 2711.19.00.00) will be exempt from both import duties and VAT. The service also announced that any debit notes issued to petroleum marketers who imported LPG under these codes from August 26, 2019, to the present will be withdrawn in accordance with prior approvals.
This new fiscal incentive is expected to reduce the cost of cooking gas in Nigeria, enhancing energy security and facilitating the country’s transition to cleaner energy. The NCS, under the leadership of Comptroller-General Bashir Adeniyi, is committed to ensuring effective implementation of these measures and has urged stakeholders to comply promptly.
The exemption of LPG and its equipment from customs duty and VAT was initially announced by the federal government on December 9, 2023, further signaling efforts to lower energy costs for consumers and promote the use of gas in Nigeria.
