In a major policy shift aimed at easing economic pressures, the Federal Government of Nigeria has announced the removal of Value Added Tax (VAT) on diesel, Compressed Natural Gas (CNG), electric vehicles, and other related energy products. This move is part of broader efforts to crash rising fuel costs and encourage the adoption of alternative energy sources in the country.
The announcement was made on Wednesday, reflecting the government’s commitment to addressing the burden of high energy prices on consumers and businesses, especially amidst global market volatility. By eliminating VAT on these critical energy sources, the government hopes to stabilize prices and foster a transition to cleaner and more sustainable energy options.
Diesel, which has seen a significant price surge in recent months, is widely used across industries and for powering generators in households, especially in regions where electricity supply remains inconsistent. Similarly, the reduction in VAT for CNG and electric vehicles is seen as a bold step to promote the use of environmentally friendly alternatives in line with global trends toward greener energy.
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Economic analysts have welcomed the policy, suggesting that it could lead to a considerable drop in operational costs for businesses that rely on diesel, as well as lower transportation costs, which have been directly impacted by fuel price hikes.
The removal of VAT is expected to have an immediate effect on prices, with stakeholders from various sectors expressing optimism that it will provide much-needed relief to both businesses and consumers.
The Nigerian government’s initiative is a response to growing calls from industry players and advocacy groups to address the rising cost of energy, which has placed pressure on businesses and households alike. This move aligns with Nigeria’s broader energy transition strategy, as it seeks to diversify its energy mix and reduce its dependence on conventional fuels.
While details regarding the timeline for full implementation are still unfolding, the government reassured Nigerians that the policy would be strictly monitored to ensure that the benefits are passed down to consumers.
