What Nigerians Should Know About FG’s 5% Surcharge on Fuel

The past week saw Nigeria’s social media space ablaze with claims that the Federal Government had slammed a fresh 5% surcharge on fuel, sending ripples of anxiety through homes and markets alike. In a nation where the cost of living already bites deep, the prospect of another hike at the pumps was enough to stir outrage.

But as panic spread, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, stepped forward on Saturday to offer clarity. In a detailed explanation posted on his official X handle, he insisted the alarm was more fiction than fact.

Is it true that Tinubu’s administration introduced a 5% surcharge on fuel?

Not quite. According to Oyedele, the provision is not new. It dates back to the Federal Roads Maintenance Agency (Amendment) Act of 2007, which already established the framework for a road maintenance levy. What the new Nigeria Tax Act, 2025 does is simply restate the surcharge for harmonisation and transparency.

“This was not part of the original tax reform bills President Tinubu submitted to the National Assembly,” Oyedele clarified. “It is not a fresh imposition.”

Does this mean the surcharge will commence in January 2026 when the new tax laws take effect?

No. The surcharge will not take effect automatically once the new laws are operational. Instead, its activation requires an explicit order from the Minister of Finance, published in the official gazette.

This safeguard, Oyedele explained, is designed to ensure that timing and economic conditions are carefully weighed before any rollout. In short, Nigerians will not see an automatic hike in January 2026.

Will the surcharge apply to all fuel products?

Not all fuels are covered. The law carves out essential household energy sources like kerosene, cooking gas (LPG), compressed natural gas (CNG), and clean renewables. These exemptions, Oyedele said, align with Nigeria’s broader energy transition agenda and the need to shield families from additional hardship.

Why not abolish the charge, given the current hardship and the risk of higher inflation?

Oyedele argued that the surcharge is not merely a revenue tool but a dedicated lifeline for roads. Nigeria’s highways are riddled with potholes, accidents, and delays that erode productivity and inflate costs.

If implemented effectively, the levy would guarantee predictable funding for road construction and maintenance, cutting travel times, reducing logistics costs, and even lowering long-term vehicle repair expenses.

“This is standard practice,” Oyedele noted, pointing out that over 150 countries impose fuel-related levies, many ranging between 20% and 80%. Nigeria’s 5% stands modest in comparison.

Why can’t savings from fuel subsidy removal be used instead?

While subsidy removal freed up funds, Oyedele stressed that the amounts are insufficient to meet the country’s massive infrastructure needs. Nigeria’s road deficit demands a dedicated and reliable stream beyond the national budget.

“A surcharge ensures roads are not left at the mercy of competing fiscal demands,” he explained.

Isn’t this at odds with the reform objective of reducing taxes and easing the burden on citizens?

Oyedele disagreed. He highlighted that the reforms had already cut or suspended multiple levies, including VAT on fuel, excise on telecoms, and the cybersecurity levy.

By consolidating taxes into a single framework, duplication is reduced and administration becomes more efficient. In essence, the surcharge’s inclusion is less about new pain for citizens and more about tidying the system for future use.

Why not just amend the FERMA Act to remove the surcharge?

According to Oyedele, this is precisely what has been done — the FERMA provision has been transferred into the new harmonised tax laws. The move, he explained, is forward-looking, ensuring Nigeria has a ready framework for sustainable road financing and climate resilience when the time is right.

The bigger picture

For now, Nigerians can rest easier: there will be no immediate 5% hike at filling stations. But the provision remains on the books, waiting for the right moment.

Oyedele’s explanation underscores a larger challenge — bridging the trust gap between citizens and government policy. Until Nigerians see transparency matched by delivery, even old laws will continue to feel like new burdens.

In the meantime, the surcharge saga is a reminder that in tax policy, as in public trust, clarity is sometimes as valuable as cash.

Stay updated with the latest news across Nigeria and beyond — visit RYNI News

For Event Coverage, Advert Placements, Article Publications.
Email: rynimedia@gmail.com
Contact Us on WhatsApp