Confusion has spread online over claims that Nigeria’s new tax laws introduce a 5% surcharge on fuel, raising fears of sudden price hikes.
Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, clarified the issue in a post on X on Saturday, stressing that the levy is not a new tax from the Tinubu administration. Instead, it stems from the Federal Roads Maintenance Agency (Amendment) Act of 2007 and was only restated in the 2025 Nigeria Tax Act for transparency and harmonisation.
The surcharge is designed to provide a stable funding stream for road construction and maintenance, an area that has long suffered from neglect and underfunding. According to Oyedele, it won’t automatically take effect in January 2026. Implementation will only begin once the Minister of Finance issues an official order published in the Gazette.
He also clarified common concerns:
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Scope: The levy does not apply to household energy products such as kerosene, LPG, or CNG, nor to clean or renewable energy.
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Purpose: It will serve as a dedicated fund for road maintenance, improving travel safety, reducing costs, and easing logistics challenges.
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Global context: Over 150 countries impose fuel-related charges—often far higher than Nigeria’s 5%—to fund infrastructure.
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Subsidy savings: While subsidy removal frees up funds, it’s not enough to cover Nigeria’s massive road financing needs, hence the need for a ring-fenced source.
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Reform consistency: The new tax framework has reduced or suspended other burdens on households and small businesses, including VAT on fuel, telecoms excise duties, and the cybersecurity levy.
Oyedele emphasized that the surcharge is neither new nor immediately enforceable. Its inclusion in the new law is meant to ensure transparency and prepare Nigeria for sustainable road financing in the future.
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