New Tax Law: Fuel Surcharge Not Coming Anytime Soon

The Federal Government has stated that there are no immediate plans to implement the five per cent fuel surcharge provision recently highlighted in the 2025 Nigerian Tax Administration Act.

In June 2025, Nigeria introduced a 5% fuel surcharge under the Tax Administration Act, requiring petrol and diesel buyers to pay extra at the pump, with the government presenting it as a dedicated fund for road maintenance and part of the country’s energy transition agenda. While officials project the levy could generate up to ₦796.5 billion annually, critics argue it will worsen living costs, adding about ₦51 per litre at a time when inflation and fuel prices are already high following the 2023 subsidy removal. 

The Trade Union Congress (TUC) condemned the policy and threatened to issue a 14-day strike, warning the Government that Nigerians, especially transport workers and small businesses cannot bear further fuel-related costs. “The proposal is an act of economic wickedness that will only worsen the struggles of ordinary Nigerians,” TUC President-General Festus Osifo and Secretary-General N.A. Toro said in a statement on Monday. Public outrage over the policy has been widespread, with Nigerians voicing concerns across social media and other platforms. In response to the backlash, the Federal Government clarified that the 5% fuel surcharge will not be implemented immediately.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this clear during a press briefing in Abuja on Tuesday, assuring Nigerians that the administration remains sensitive to the current economic realities facing households and businesses. “We understand the economic pressures faced by Nigerian households and businesses,” Edun said. “The government is fully aware of these realities and will not take decisions that will make things even more burdensome.”

The minister explained that the surcharge is not a new tax provision but a re-emphasis of a provision first introduced in 2007 under the Federal Road Maintenance Agency (FERMA) Act. Originally, 40% of the revenue was meant for FERMA and 60% for states, aimed at sustainably funding road infrastructure and maintenance nationwide. He further noted that its inclusion in the 2025 Act was part of a broader effort to harmonize existing tax provisions into a more transparent and compliant framework. The minister reiterated the administration’s commitment to macroeconomic stability and private sector led growth without imposing further hardship on Nigerians.

While the fuel tax aims to address critical infrastructure needs, its delayed implementation means Nigerians will not face immediate increases in fuel costs. This pause reflects the government’s awareness of the current economic hardships many households and businesses endure. However, should the surcharge be introduced in the future, it could lead to higher fuel prices, affecting transportation costs and the broader economy.