Taiwo Oyedele Clarifies New 5% Fuel Tax; Says Revenue Will Fund Transport Infrastructure to Cut Logistics Costs and Ease Inflation

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has clarified key aspects of Nigeria’s newly enacted 5% surcharge on fossil fuel products, as outlined in the Nigeria Tax Administration Act.

Implementation Date:

Oyedele stated that contrary to circulating misinformation, the 5% fuel surcharge will not immediately take effect in January 2026. Instead, the law specifies that the effective date will be announced by the Minister of Finance, Wale Edun, via an official order  .

Purpose of the Tax:

The surcharge is earmarked for transport infrastructure development. Oyedele explained that the dedicated revenue will be used to reduce transportation and logistics costs, ultimately helping to curb inflation for Nigerians  .

Overview of the Tax Law:

This surcharge is part of a broader series of tax reforms signed into law on June 26, 2025, aimed at broadening Nigeria’s non-oil revenue base. The Act applies to refined fossil fuels such as petrol, diesel, aviation fuel, and other petroleum products—but exempts clean or renewable energy products, household kerosene, cooking gas, and CNG  .

Estimated Impact on Consumers:

At a prevailing pump price of around ₦900 per litre, the 5% surcharge means consumers could pay about ₦45 extra per litre, should the implementation go ahead under current pricing conditions  .

Conclusion:

While the law is firmly in place, its rollout timeline remains flexible and tied to a ministerial directive. The government emphasizes its intention to use the surcharge revenue constructively to enhance infrastructure and tackle the cost of living.

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