Taiwo Oyedele, Chairman of Nigeria’s Presidential Committee on Fiscal Policy and Tax Reforms, clarified that the 5% fuel tax will not be implemented in January 2026 as previously rumored.
Instead, the tax will take effect on a future date to be announced by the Minister of Finance. Oyedele stated that the purpose of the tax revenue is to fund transport infrastructure and ultimately help reduce inflation
According to him, the revenue generated from the tax will be earmarked and dedicated to transport infrastructure projects.
By funding better transport infrastructure, Oyedele stated that the government aims to reduce logistics and transportation costs, which should help to bring down inflation for Nigerians.
The fuel levy is part of a wider tax reform effort by the Tinubu administration to simplify Nigeria’s tax system, boost government revenue, and increase the tax-to-GDP ratio.
The new tax applies to various fossil fuel products, including petrol and diesel.
Items exempted from the tax include clean or renewable energy products, household kerosene, cooking gas, and Compressed Natural Gas (CNG).
Despite the government’s stated intentions, the tax has met with significant opposition from citizens and various groups.
Critics, including former presidential candidate Peter Obi, argue that the tax will worsen the current economic hardship and push up the cost of living.
The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has also expressed concern that the tax could cause outlets to close
