The Federal Government has defended the proposed 5% fuel surcharge, stating it’s intended to generate a dedicated fund for Nigeria’s deteriorating roads, not to add extra strain on households.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, acknowledged public concerns about potential inflation but emphasized that improved road infrastructure is crucial to lowering transportation costs.
According to Oyedele, Nigeria has approximately 200,000 kilometers of roads, with only about 60,000 in good condition. He linked the poor state of roads directly to inflation, citing a significant gap between rural and urban food prices. Oyedele explained that the surcharge would be implemented carefully to avoid stoking inflation or hurting vulnerable citizens, possibly timing it with naira appreciation or crude oil price drops.
The 5% fuel surcharge is part of the Nigeria Tax Act 2025 and is proposed to take effect in January 2026. Exemptions include household kerosene, cooking gas (LPG), compressed natural gas (CNG), and renewable energy sources. The government argues that subsidy revenues alone are insufficient to close Nigeria’s infrastructure gap.
The Trade Union Congress has threatened to call a nationwide strike within two weeks if the Federal government fails to scrap the tax.