The Federal Government has clarified that the proposed five per cent surcharge on petrol and diesel has no immediate commencement date, dispelling speculation that the policy would kick off in January 2026.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, explained that although the new Harmonised Tax Act signed in June provides for a levy on fossil fuels, its implementation depends solely on a directive from the Minister of Finance.
“There’s a law that provides for a surcharge on fuel under the Federal Roads Maintenance Agency Act, and this provision was carried into the new tax law. But it is not set to begin in January 2026, contrary to some misinformation being circulated,” Oyedele said.
When eventually activated, the levy will apply strictly to petrol and diesel sales, excluding cleaner alternatives such as cooking gas, compressed natural gas, household kerosene and other renewable fuels.
The surcharge is not new, having originated in the Federal Roads Maintenance Agency Act of 2002 and later amended in 2007 to introduce a five per cent user charge on petrol and diesel.
Funds are shared with 40 per cent allocated to FERMA and 60 per cent to state road agencies.
Oyedele stressed that government will only trigger the levy when it believes the timing is right. “The plan is to dedicate the revenue to transport infrastructure that reduces logistics costs and ultimately lowers inflation for Nigerians,” he said.
Since the removal of petrol subsidies in 2023, pump prices have more than tripled, worsening inflation. Critics warn that an additional levy could aggravate economic hardship.
President Bola Tinubu, currently on a 10-day working trip in Europe, has defended his fiscal reforms, noting that Nigeria achieved its 2025 revenue target ahead of schedule.
He argued that the reforms are weaning the country off borrowing while encouraging diversification into agriculture and non-oil sectors.
Labour unions, however, said they have not been formally briefed on the policy. The Nigeria Labour Congress indicated it would convene stakeholders to decide on a response if the levy is enforced, given its history of resisting fuel price hikes.
Former Labour Party presidential candidate Peter Obi has also criticised the plan, urging the government to shelve it.
According to him, any additional fuel tax would deepen the suffering of citizens already struggling with transportation costs.
“Leadership should be about easing the burden on Nigerians, not adding to it, especially since government has claimed to have exceeded its revenue targets,” Obi said.
He added that the administration had failed to deliver on promised subsidies for cleaner energy alternatives, leaving citizens with no affordable options.
