Nigeria Implements Tax Relief to Boost Oil Sector Cost Efficiency

Nigeria is advancing its energy and oil sectors through initiatives aimed at improving transparency, local participation, and efficiency. The Civil Society Legislative Advocacy Centre has called for transparency, accountability, and tax incentives to promote the energy transition towards carbon neutrality by 2060, urging interagency collaboration and strong advocacy on subsidy fund usage to reduce fossil fuel dependency. In the oil and gas sector, former President Goodluck Jonathan highlighted the success of the Nigerian Oil and Gas Industry Content Development Act 2010, which boosted local participation from 5% to 56% over 15 years. Recently, President Bola Tinubu signed an executive order introducing tax incentives tied directly to verifiable cost savings for upstream oil operators, capped at 20% of annual tax liabilities, aiming to foster efficiency and competitiveness. Experts note that the success of these reforms depends heavily on effective implementation and alignment among government agencies. Together, these efforts reflect Nigeria's commitment to sustainable energy transition and enhancing domestic capacity in its oil industry.