- 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.
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.
FG eyes N796bn annually from 5% petrol surcharge
31st July 2025
- 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.
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.