FG removes import duty, VAT on cooking gas, CNG vehicles to cut energy costs
By Aboki Forex —
The Federal Government has removed import duty and Value Added Tax on cooking gas, compressed natural gas and electric vehicles to boost cleaner energy adoption. The Nigeria Customs Service announced the tax incentives on Thursday, July 30, 2026, under the Presidential Gas for Growth Initiative.
The policy is expected to lower the cost of bringing cooking gas and related equipment into Nigeria. Industry dealers have already begun adjusting prices downward, raising hopes that more households and businesses will enjoy cheaper cooking gas in the coming weeks if global prices remain stable.
Tax relief covers clean energy vehicles and equipment
According to the Nigeria Customs Service, the incentives apply to a broad range of products, including fully CNG-powered vehicles, fully LPG-powered vehicles, battery electric vehicles, and extended-range electric vehicles capable of travelling at least 200 kilometres on electric power. CNG and LPG conversion kits, certified tricycles and motorcycles approved by the Federal Ministry of Finance, and gas-distribution semi-trailers fitted with CNG, LPG or LNG storage tanks are also covered.
To benefit from the exemptions, importers must obtain an Import Duty Exemption Certificate (IDEC) from the Ministry of Finance and meet all regulatory requirements.
Hybrid and luxury vehicles still pay duty
Not every vehicle qualifies for the tax relief. The government said hybrid vehicles, dual-fuel CNG/petrol and CNG/diesel vehicles, luxury vehicles valued at $100,000 or more, overseas CNG conversions without factory-fitted systems, non-self-propelled trailers and vehicle spare parts will continue to attract import duty and VAT.
The incentives follow the Federal Government's introduction of a green tax surcharge on imported vehicles with engines above 2,000cc. Vehicles with engines between 2.0 and 3.9 litres attract a two per cent levy, while those with engines of 4.0 litres and above pay a four per cent surcharge. Mass transit buses and fully electric vehicles remain exempt.
Customs says policy will strengthen energy security
Customs said the fiscal incentives are designed to lower transportation and energy costs, stimulate investment in clean energy infrastructure, expand the adoption of alternative fuel technologies and strengthen Nigeria's energy security. The service urged importers, licensed customs agents and other stakeholders to comply fully with the new guidelines.
The announcement comes as LPG imports into Nigeria surged by 1,400 per cent to 1.5 kilotonnes per day in June 2026, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The NMDPRA Fact Sheet for June, released on Friday, July 17, 2026, also showed daily LPG consumption rose by 24 per cent to 5.1 kilotonnes per day from 4.1 kilotonnes in the previous month.
For Nigerian households, the removal of import duty and VAT on cooking gas should mean lower prices at the pump and in the kitchen. For businesses, cheaper clean energy equipment and vehicles could cut transport and operating costs, while the broader push away from petrol supports Nigeria's long-term energy transition.