FG eliminates VAT and customs duty obligations on imported cooking gas in Nigeria, aiming to boost accessibility and affordability

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The Federal Government, in a letter dated November 28, 2023, and signed by Wale Edun, the Minister of Finance, has decided to eliminate customs duty and value-added tax (VAT) on the importation of liquefied petroleum gas (LPG), commonly known as cooking gas, and its associated equipment.

This move is geared towards reducing the overall cost of cooking gas nationwide.

The decision aligns with President Bola Tinubu’s commitment to enhancing the investment climate, meeting local LPG demand, lowering market prices, and encouraging cleaner cooking practices.

The directive specifies that LPG importation with HS Codes 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00 will be exempt from Import Duty and VAT, resulting in a 0% duty rate and 0% VAT rate, effective immediately.

The Ministry of Finance has instructed the Nigerian Customs Service to comply with the presidential directive, dated July 29, 2022, and retract all debit notes issued to petroleum marketers who imported LPG using specific codes from August 26, 2019, to the present.

Furthermore, the Ministry has extended the exemption from VAT and duty payments to various items, including LPG cylinders, LPG cascades, gas leak detectors, steel pipes, steel valves and fittings, LPG dispensers, gas generators, and LPG trucks.

This decision follows concerns raised by Ekperikpe Ekpo, the Minister for Petroleum Resources (Gas), regarding the rising cost of cooking gas and its impact on citizens.

Notably, a team has been assembled to address the challenges associated with ensuring an adequate and affordable supply of cooking gas to Nigerians. As of December 8, residents in Abuja were paying an average of N11,800 to refill their 12.5kg gas cylinders.

It’s crucial to note that 40% of the country’s cooking gas is sourced from the Nigerian Liquefied Natural Gas (NLNG) Limited, while the remaining 60% is imported, with its pricing influenced by the Naira’s strength against the Dollar, currently at N1200 for a single dollar on the black market as of December 9.

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