Gas prices to drop on Customs import duty waiver

Businesses and households in Nigeria may soon see significant cost savings in gas-related products, as the Nigeria Customs Service (NCS) has commenced the implementation of zero import duty on machinery, equipment, and spare parts for gas utilisation.

This decision comes under the Presidential Gas for Growth Initiative, which expected to lower operational costs for businesses and bring relief to consumers.

The waiver, which is supported by Part 1, Section Five of the Customs and Excise Tariff Act, extends to equipment used for Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), and other infrastructure critical to expanding Nigeria’s gas economy.

For businesses involved in the gas value chain, the exemption eliminates significant financial barriers. Importers of machinery and components required for the processing, storage, and distribution of CNG and LPG no longer need to worry about hefty import duties, which have often contributed to high operational costs.

“This incentive is expected to encourage investments in gas infrastructure, reduce overhead costs for businesses, and facilitate the expansion of clean energy initiatives,” said Abdullahi Maiwada, the National Public Relations Officer of the NCS.

The waiver also applies to CNG and LPG conversion and installation services, as well as related equipment components. This will likely lower costs for businesses providing gas conversion services, ultimately benefiting vehicle owners and industrial users transitioning to gas.

Consumers, too, stand to gain. The exemption of import duty and Value Added Tax (VAT) on imported LPG under HS Codes 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00 is expected to lower the cost of cooking gas. The retroactive withdrawal of debit notes issued to petroleum marketers since 2019 provides further relief, ensuring cost savings trickle down to households.

“These measures are designed to alleviate the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources,” Maiwada added.

While the incentives promise substantial cost reductions, importers must adhere to a defined process to benefit. This includes obtaining an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance and securing a letter of support from the Office of the Special Adviser to the President on Energy.

As the NCS, under Comptroller General Bashir Adeniyi, implements these measures, stakeholders are optimistic that the initiative will not only reduce gas costs but also attract investments, strengthen energy security, and position Nigeria as a leader in Africa’s clean energy transition.