Good News for Dangote, Others as FG Gives Tax Break to Refinery Builders

• The Nigerian government said it is granting tax holiday to those building refinery in the country
• Minister of state for petroleum said this offer would last for three years but may be further extended
• This comes after FG in December announced a zero per cent VAT waiver on feed gas for all processed, CNG and LPG

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

To increase domestic refining capacity and lessen reliance on imports, the Nigerian government has unveiled a package of tax exemptions and incentives for companies constructing new refineries.

FG gives condition as six refineries are set to begin operation

The ministry of petroleum resources (Gas) offered a three-year tax exemption to businesses that construct and run gas pipes on Tuesday.

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It cited funding and infrastructure investment as essential to the growth of the gas industry, according to a BusinessDay report.

Tax breaks could be extended

The state petroleum (Gas) minister, Ekperipe Ekpo, stated that the tax may be extended for five years if the ministry of petroleum resources was satisfied.

He said this at the Petroleum Technology Association of Nigeria's 8th Sub-Saharan Africa International Petroleum Exhibition and Conference in Lagos.

Ekpo stated that the Midstream and Downstream Gas Infrastructure Fund was established to allow the government to make equity investments in gas infrastructure as one of the instruments to address this issue.

“As we gather to harness ideas to develop our energy sector, let us not forget the various incentives put in place by the government to encourage the gas sector development.

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“These include three-year tax waivers for companies that build and operate gas pipelines and could be extended to five years at the satisfaction of the ministry of petroleum resources. Recently, the president approved the zero duty and value-added tax for imported compressed natural gas (CNG) and liquefied natural gas (LNG).”

Earlier, This Day reported that the FG approved a zero per cent VAT waiver on feed gas for all processed, compressed natural gas (CNG), and imported liquefied petroleum gas in December 2023, which took effect immediately.

The liquefied petroleum gas (LPG) and CNG equipment components, conversion and installation services, as well as all infrastructure and equipment connected to the expansion of LPG, CNG, and the Presidential CNG Initiative, including conversion kits, are also included in the VAT-free waiver.

The minister said these are aimed at deepening gas p*netration in Nigeria.

He asserted that the government is not the exclusive entity responsible for developing energy resources.

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As a result, he urged the private sector industry participants to work together, share information, and show dedication.

At the same time, the government enacts the necessary laws and fosters an atmosphere that allows companies to prosper.

Another Nigerian billionaire builds new refinery

Legit.ng reported that a Chinese cargo ship, laden with the Akwa Ibom refinery project consignment, has berthed in Calabar port in Cross River state.

The development is a significant milestone in the construction of a state-of-the-art refinery in Akwa Ibom state.

BusinessDay reports that two refinery projects are expected in the state's Eket and Onna local government areas.

Source: Legit.ng