₦airaland Forum

• Consumers decry new fuel tax after subsidy removal as law begins Jan. 2026

The Federal Government may rake in N796bn annually from the introduction of a five per cent surcharge on locally produced and imported petrol, based on its new tax policy slated to take effect from January 1, 2026, an analysis by The PUNCH has revealed.

The five per cent surcharge on refined petroleum products is contained in the Nigeria Tax Administration Act, one of four tax reform bills signed into law by President Bola Tinubu on June 26, 2025. Our correspondent obtained a copy of the Act on Wednesday.

However, consumers have opposed the move, stressing that the government had earlier removed fuel subsidies and now plots to impose a five per cent surcharge on fuel, without considering the harsh economic realities nationwide.

This came as oil marketers stated that the five per cent surcharge may further hike the pump prices of refined petroleum products.

The surcharge forms part of government efforts to shore up non-oil revenues and promote fiscal sustainability amid mounting public debt and subsidy-related costs. The policy targets fossil fuel products provided or produced in Nigeria.

Fossil fuel products include petrol, diesel, kerosene, aviation fuel, and Compressed Natural Gas, among others. They are derived from the processing of fossil fuels such as coal, petroleum, and natural gas.

However, items exempted from the new tax are clean or renewable energy products, as well as household kerosene, cooking gas, and Compressed Natural Gas.

Findings by The PUNCH showed that the government would garner about N796bn annually from only petrol once the five per cent surcharge takes effect.

An analysis by our correspondent, using the volume of imported and refined petrol, showed that the government could earn N796bn based on the 2024 estimates of national consumption and refining capacity production data provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

This N796bn is purely for petrol and doesn’t include other fossil fuel derivatives such as diesel and aviation fuel.

A breakdown of data from the NMDPRA shows that the total volume of petrol consumed by Nigerians reached 18.75 billion litres in 2024. NMDPRA, an agency of the Federal Government, is the mid- and downstream regulator of the oil and gas industry.

The 18.75 billion litres of petrol translates to about N15.93tn, using the average price of N850 for a litre of petrol consumed in Nigeria during the review period. Five per cent of N15.93tn represents N796bn, which is the sum that the Federal Government may rake in annually from only petrol once it implements the planned surcharge.

This, therefore, implies that the government’s earnings from the proposed surcharge on fossil fuel products (petrol, diesel, and aviation fuel) would be more than N796bn once the five per cent surcharge policy on refined petroleum products takes effect, after being approved by the Minister of Finance, as stated in the Act.


According to the law, the surcharge will be imposed on all “chargeable fossil fuel products” and will be calculated based on the retail price of the product. The Act stipulates that the surcharge will apply to a “chargeable transaction” such as the supply, sale, or payment for the product, “whichever occurs first”.

The law read in part, “A surcharge is imposed at five per cent on chargeable fossil fuel products provided or produced in Nigeria, and shall be collected at the time a chargeable transaction occurs.

“(1) For the purpose of imposing a surcharge on fossil fuel products, the chargeable transaction shall be the supply, sale, or payment, whichever occurs first. (2) Surcharge shall be computed based on the retail price of all chargeable fossil fuel products.”

The implementation date, however, remains undecided and is now subject to the approval of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. “The minister may, by an Order issued in the Official Gazette, indicate the effective date of commencement of the administration of the surcharge on fossil fuel products under this Chapter,” the Act said.

“The Service shall administer and collect the surcharge every month and may issue regulations for its administration,” a section of the Act reads. A surcharge is an additional fee or tax added to the price of a good or service beyond the base price.

The law tasks the Federal Inland Revenue Service, which will be renamed the Nigeria Revenue Service by 2026, with administering and collecting the surcharge every month. It also empowers the agency to issue further regulations for effective implementation.

It further stated, “The surcharge under this Chapter shall not apply to the following fossil fuel products: (a) clean or renewable energy products; (b) household kerosene; (c) cooking gas; and (d) Compressed Natural Gas.


“(2) For the purpose of this section, ‘clean or renewable energy’ means energy from solar, wind, hydropower, geothermal, or plant and animal waste, which are naturally replenishing, produce little or no environmental pollution or greenhouse gas emissions, and do not deplete over time.”

The Nigeria Tax Act is one of four tax laws signed into law by President Tinubu to overhaul the country’s tax framework. The others include the Joint Revenue Board (Establishment) Law, the Nigeria Revenue Service (Establishment) Act, and the Nigeria Tax Administration Act.

The laws are aimed at enhancing revenue collection efficiency, promoting fiscal transparency, and supporting the implementation of Nigeria’s medium-term revenue strategy.

With rising government borrowing and growing fiscal pressures, the surcharge is expected to form part of new efforts to boost non-oil revenue, though its real impact will depend largely on how and when it is implemented.

Consumers kick

However, marketers, transport workers, farmers, human rights advocates, and civil society groups across Nigeria have raised opposition to the proposed implementation of the five per cent users’ charge on petrol and diesel pump prices

Speaking to The PUNCH, the National Chairman of the Joint Drivers Welfare Association, Akintade Abiodun, accused the government of using Nigerians as “lab rats” for unpopular economic decisions.

The Association of Nigerian Refineries Petroleum Marketers also raised an alarm recently over the Federal Government’s plan to enforce a five per cent user charge on fuel pump prices through the Federal Roads Maintenance Agency, warning of severe operational and economic consequences for marketers and consumers.

The association’s National Chairman of the Board of Trustees, Usman Ali, disclosed this at a press conference. The association acknowledged the past failures of the subsidy system, which it described as riddled with corruption, inefficiency, and massive fiscal leakages.

It warned that the removal of the subsidy must be matched with robust regulatory frameworks to avoid a resurgence of malpractice in the downstream sector. The association called for digital tracking systems, transparent procurement procedures, and effective enforcement to improve accountability and reduce losses

The association, however, expressed conditional support for the proposed levy, stating that while improving Nigeria’s road infrastructure was necessary, the charge must be implemented with caution and tied to visible and immediate road rehabilitation.

“The powers that be in this country are taking us for a ride. They think we won’t react just because we were quiet the last time they increased fuel. Now they want to add another cost on top of the already expensive pump price. This must be reversed,” he said.

On its part, the Chancellor of the International Society for Social Justice and Human Rights, Jackson Omenazu, chided the government for pursuing policies that are “anti-people.” He warned that growing public frustration could explode if authorities continue to ignore the sufferings of citizens.

Omenazu said, “How can lawmakers sit in the comfort of their offices, after increasing their own allowances, to approve policies that will send poor Nigerians to early graves? What kind of leadership is this?

IPMAN reacts

The Independent Petroleum Marketers Association of Nigeria has warned that the five per cent surcharge on petroleum products may lead to an increase in the pump price of fuel across the country.

The association explained that although the new levy would be factored into the pre-pricing structure by industry players such as refineries and marketers, the financial impact would eventually be transferred to consumers.

National Publicity Secretary of IPMAN, Chief Chinedu Ukadike, who spoke in an interview with The PUNCH on Wednesday, said the development could complicate Nigeria’s already fragile downstream pricing environment.

“The only implication is that industry players like the refineries will add it to their pre-pricing costs, but not post-pricing costs,” Ukadike said. “But indirectly, it would also lead to an increase in the pump price.” He said the association is closely monitoring how the policy will be implemented.

According to him, “Any additional charge on the cost of importation or refining of petroleum products will, by extension, reflect in the final retail price. This is because marketers operate on thin margins and cannot absorb such levies without a ripple effect.”

Source: https://punchng.com/FG-eyes-N796bn-annually-from-5%-petrol-surcharge

If Tinubu really want to add another 5 percent surcharge to fuel prices despite what his last fuel price increase did to economy then henis a very very wicked person

taxing the nigerians more and harder yet we can not see and feel the result of what they are doing

They claimed to save billions from the subsidy removal,yet the economy gone from bad to worse, and we are borrowing at an alarming rate.

Tinubu knows nothing. He will use the money to buy cars, yatchs, and jets.

A country that spends senselessly while in enormous debt.

All I know is that Tinubu mean well for the poor masses. Peter Obi would have done worse due to his antecedent of saving money while anambra people suffer from terrible governance

When charlatans rule, the people suffer.

The rulers don't care about the suffering of the masses as it hasn't hit them yet

This policy will be implemented and nothing will hapoen...at least for now.

But...o'nrugbo bo.

adenigga:
• Consumers decry new fuel tax after subsidy removal as law begins Jan. 2026



Source: https://punchng.com/FG-eyes-N796bn-annually-from-5%-petrol-surcharge

Watianoengineer:
All I know is that Tinubu mean well for the poor masses. Peter Obi would have done worse due to his antecedent of saving money while anambra people suffer from terrible governance

Please make racist and tribalistic comments on this section

What is wrong with this man called Tinubu. All he thinks and knows is tax and more tax, borrowing and looting. Nigeria is in big trouble

why will you surcharge after removing subsidy. this one na werey strategy

victor175:
What is wrong with this man called Tinubu. All he thinks and knows is tax and more tax, borrowing and looting. Nigeria is in big trouble

That's the only thing Tinubu know, more tax after tax and you wonder what they do with all this money...

How come nobody highlighted this fraud in the new bill when it was being passed?

Did they hide it from the public ?

Well it's good... We are getting there gradually,.. pm product only... exception of gas and kerosene,but the government should mk kerosene more available....

PlasmaTV:
Please make racist and tribalistic comments on this section

That kini kan engineer,in his mind, he have said something meaningful.

Tax! too much will kill economy and reduce work force in the country just like italy. The different nigeria own tax you don't see the use.

Tinubu to Nigerians: I know you are going through a lot but you haven't suffered enough!

''However, consumers have opposed the move, stressing that the government had earlier removed fuel subsidies and now plots to impose a five per cent surcharge on fuel, without considering the harsh economic realities nationwide''
This is one of the meaning of widening the tax net.
We are getting there gradually.
This is how the poor will breathe🤣🤣🤣🤣

Prices may rise, hitting consumers hard. This idea is off.

adenigga:
• Consumers decry new fuel tax after subsidy removal as law begins Jan. 2026

Source: https://punchng.com/FG-eyes-N796bn-annually-from-5%-petrol-surcharge

If ebilokan was able to cage 20 million smart Lagosians with his tax & loot master plan for 26 years, why would he change the winning formula for 200 million Nigerians?

Meanwhile, APC shege beat goes on, 10 years after ebilokan used his expired northerner Buhari to make his fellow southerner Jonathan a one term president.

anonimi:
May 1, 2025

May Day: Hunger, unemployment, insecurity real— Tinubu

According to him: “The theme demands our collective attention and serves as a stark reminder of the need to create an environment where every worker feels safe, valued, and empowered to contribute to the growth and prosperity of our nation. As your President, I assure you that this administration is committed to creating such an environment for the common good.”

On the economic hardship, he noted that while it is a global phenomenon, its effects on Nigerians are particularly severe.

Tinubu said: “I am aware of the peculiarities of the economic hardship Nigerians face—rising living costs, hunger, insecurity, unemployment, and the loss of livelihoods. These challenges are real and demand definitive solutions, which I am poised to address as your President.

https://www.vanguardngr.com/2025/05/may-day-hunger-unemployment-insecurity-real-tinubu/

AK481:
How come nobody highlighted this fraud in the new bill when it was being passed?

Did they hide it from the public ?

You should get in touch with your own senator and representative for the details, not so

anonimi:
“The worst illiterate is the political illiterate, he doesn’t hear, doesn’t speak, nor participates in the political events.

He doesn’t know the cost of life, the price of the bean, of the fish, of the flour, of the rent, of the shoes and of the medicine, all depends on political decisions. The political illiterate is so stupid that he is proud and swells his chest saying that he hates politics.

The slowpoke doesn’t know that, from his political ignorance is born the prostitute, the abandoned child, and the worst thieves of all, the bad politician, corrupted and flunky of the national and multinational companies.”

― Bertolt Brecht

Watianoengineer:
All I know is that Tinubu mean well for the poor masses.

Peter Obi would have done worse due to his antecedent of saving money while anambra people suffer from terrible governance

The fact is not far from what you have said about the former governor.

http://telegraphng.com/2013/06/anambra-distributes-177-vehicles-to-traditional-rulers/


[quote author=NLCreator post=126854133]Peter Obi, presidential candidate of the Labour Party (LP) in the 2023 elections, has defended the purchase of sports utility vehicles (SUVs) for members of the national assembly.

There have been reports that the leadership of the 10th national assembly has bought SUVs for all lawmakers.

Each SUV is said to be valued at N160 million.

The LP had asked members of the party in the national assembly to kick against “wastage”.

While responding to questions during a press conference in Abuja on Monday, the former governor of Anambra said the SUVs are not personal cars of the lawmakers, noting that they are for official use.

“Let me start with the issue of Labour Party members in the house. I have actually discussed this issue with them,” Obi said.

“Surprisingly, I can tell you I heard that these vehicles are official cars. They have to use it. It is meant for office.

“So it is not as if it is their vehicle. They said it is official cars and you are meant to use it while you are in the senate.”

Obi also hinted at contesting for the country’s number one position in 2027, adding that Nigeria deserves dedicated and visionary leaders who will lead the country towards a brighter future.

https://www.thecable.ng/theyre-for-official-use-obi-defends-purchase-of-n160m-suv-for-lawmakers/amp

Journalist: how do you intend to engage members of your party who are members of the house, so that they can stand different.......?

PO: Let me start with the issue of labour party members in the house, have actually discussed this issue with them, surprisingly, I can tell you ,… pic.twitter.com/svybrcY4t3

— Beyond (@chigozie0102) November 7, 2023

]

SalamRushdie:
If Tinubu really want to add another 5 percent surcharge to fuel prices despite what his last fuel price increase did to economy then henis a very very wicked person

Are you just knowing that tinubu is wicked?

ore characters needed

anonimi:
If ebilokan was able to cage 20 million smart Lagosians with his tax & loot master plan for 26 years, why would he change the winning formula for 200 million Nigerians?

Meanwhile, APC shege beat goes on, 10 years after ebilokan used his expired northerner Buhari to make his fellow southerner Jonathan a one term president.

This is the reason I want Obi to use Atiku to also make him a one term president, if he could use moslem moslem ticket to win an election to the detriment of equality, then Obi should forget the turn of the south to do a second term and support Atiku for the presidency, Atiku/ Obi ticket will send APC out of Aso Rock.

When we told you, they are TAX collectors, now they will tax you more from 2026 with the new tax bills. Now 5% surcharge on petroleum products to make you poorer. Tinubu is OTP. Refineries that can't never FUNCTION.

Basket case of government plc. More and more revenues, more and more loans to fritter away with zero accountability on wasteful, unproductive projects to benefit contractor friends and family.

bentenny:
Tinubu to Nigerians: I know you are going through a lot but you haven't suffered enough!

Indeed. Suffered enough to wake up and start asking serious questions as to how the country's finances are handled. Seeking transparency in government transactions and taking charge of what government spends money on.

5% tax wouldn’t make any difference from a litter of fuel. Highest 100 naira. Another thing is that the damage have been done to the economy and correctly there is no revival that’s the sad reality.

Once price goes up in Nigeria it doesn’t come down again.

Na wa o, after subsidy removal, we still dey find the money wey una save, now una want add tax again on top

chigator2:
why will you surcharge after removing subsidy. this one na werey strategy

That is the renewed hope they were telling Nigerians about

After removing fuel subsidy they still want to surcharge,5% subcharge on fuel....that will increase the price of fuel the more and more hardship, hunger, galloping inflation....it's quite unfortunate.. renewed hope to renewed shege

chigator2:
why will you surcharge after removing subsidy. this one na werey strategy

Yeeeeee.!
It pass werey o, na devil incarcerated.
I don't blame him but those useless self centred elders, e.g.where's Pastor Tunde Bakare? Prof.Wole Soyinka? All those who occupied Ojota during Jonathan’s administration?.......