The Federal Government of Nigeria has approved the waiver of import duty and Value Added Tax (VAT) on fully Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and battery electric vehicles (EVs) as part of efforts to accelerate the country’s transition to cleaner transportation, reduce fuel costs, and strengthen energy security. The incentive was announced by the Nigeria Customs Service (NCS) under the Presidential Gas for Growth Initiative.
According to the new policy, the tax exemptions apply to fully CNG-powered vehicles, fully LPG-powered vehicles, battery electric vehicles (BEVs), and extended-range electric vehicles (EREVs) capable of travelling at least 200 kilometres on electric power alone. The incentives also cover CNG and LPG conversion kits, eligible tricycles and motorcycles certified by the Federal Ministry of Finance, as well as gas-distribution semi-trailers equipped with CNG, LPG, or Liquefied Natural Gas (LNG) storage tanks.
To benefit from the programme, importers must obtain an Import Duty Exemption Certificate (IDEC) from the Ministry of Finance and comply with all applicable customs and regulatory requirements. The government said the certification process is intended to ensure that only qualifying vehicles and equipment benefit from the fiscal incentives.
The government, however, clarified that several categories of vehicles will not qualify for the exemptions. These include hybrid vehicles, dual-fuel CNG/petrol and CNG/diesel vehicles, luxury vehicles valued at US$100,000 or more, overseas CNG conversions that are not factory-fitted, non-self-propelled trailers, and vehicle spare parts. These categories will continue to attract the applicable import duty and VAT.
The Nigeria Customs Service stated that the fiscal incentives are designed to support the Federal Government’s broader objectives of lowering transportation and energy costs, encouraging investment in clean energy infrastructure, expanding the adoption of alternative fuel technologies, and promoting environmental sustainability. The initiative is also expected to reduce Nigeria’s dependence on petrol by encouraging greater use of gas-powered and electric mobility solutions.
The latest announcement complements ongoing government reforms aimed at promoting cleaner transportation. Earlier policy measures introduced a green tax surcharge on imported high-engine-capacity vehicles while exempting mass transit buses and electric vehicles, reflecting a broader strategy to encourage low-emission mobility and reduce the environmental impact of the transport sector.
Industry stakeholders have welcomed the policy, noting that removing import duty and VAT is expected to lower the acquisition cost of CNG and electric vehicles, improve access to cleaner transport technologies, and stimulate investment in charging stations, gas conversion centres, and related infrastructure. The incentives are also expected to support local businesses involved in vehicle conversion, clean energy services, and sustainable transportation solutions.
Analysts believe the measure represents a significant step in Nigeria’s energy transition agenda. By reducing the cost of importing alternative-fuel vehicles and equipment, the government aims to accelerate the adoption of cleaner mobility technologies, reduce fuel import dependence, cut greenhouse gas emissions, and strengthen the country’s long-term energy security.
