5% Fuel Surcharge: It’s Not New Tax – FG
The Federal Government has dismissed claims that a new 5 percent surcharge on fuel has been introduced, clarifying that the provision has existed since 2007 under the Federal Roads Maintenance Agency (FERMA) Act.
In a statement on Sunday, the Presidential Fiscal Policy and Tax Reforms Committee explained that the provision was only restated in the new Tax Act for harmonisation and transparency purposes, and not as a fresh measure initiated by the Tinubu administration.
According to the committee, the surcharge will not take effect automatically when the new tax laws commence in January 2026. Rather, it will only become operational when the Minister of Finance issues an order published in the Official Gazette, ensuring that economic conditions are carefully considered before implementation.
The clarification further noted that the levy does not apply to household energy products such as kerosene, cooking gas (LPG), compressed natural gas (CNG), or renewable energy sources, in line with Nigeria’s energy transition agenda.
Addressing concerns about its impact on citizens, the committee stressed that the surcharge is meant to serve as a dedicated fund for road maintenance and infrastructure. “If implemented effectively, it will improve road safety, reduce travel time and costs, and support the wider economy. Over 150 countries already impose similar levies ranging between 20 and 80 percent of fuel products,” the statement read.
It added that while savings from fuel subsidy removal would contribute to public financing, they remain insufficient to meet the country’s huge road infrastructure needs. A dedicated fund, it argued, provides more reliable and predictable financing.
The government also highlighted that ongoing tax reforms have already reduced multiple levies affecting households and small businesses, including the removal of VAT on fuel, excise on telecoms, and the suspension of the cybersecurity levy.
The surcharge, now transferred from the FERMA Act into the new tax laws, is intended to provide a forward-looking legal framework that ensures sustainable financing for road infrastructure in the future, not for immediate application.
SOURCE: Presidential Fiscal Policy and Tax Reforms Committee
