The Federal Government has announced plans to introduce a fuel tax in Nigeria when economic conditions improve and Nigerians’ incomes can accommodate the additional financial burden.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, disclosed this during an interview on the sidelines of the 2026 annual meetings of the International Monetary Fund (IMF) and the World Bank in Bangkok, Thailand.
Oyedele explained that the government would not introduce the proposed tax immediately, stressing that the economy must first stabilise and household incomes must improve sufficiently to absorb the additional cost.
According to the minister, revenue generated from the proposed fuel tax would be used to support road infrastructure and establish a fuel reserve designed to protect the country against future price shocks.
He explained that introducing the tax while petrol subsidies were still in place would have undermined its purpose because the government would effectively have borne the cost through the subsidy system.
Oyedele added that imposing the tax immediately after the removal of petrol subsidies would have placed further financial pressure on Nigerians, who were already adjusting to higher fuel prices.
The finance minister said the government’s priority should be to increase incomes faster than prices rise rather than attempting to keep prices artificially low.
He argued that sustained income growth would help improve living standards, strengthen the middle class and support broader economic prosperity.
“The objective should be that instead of trying to suppress prices, which hasn’t worked for us, it hasn’t worked for any country in the world, not one. Instead of trying to suppress prices, think about how to grow income faster than prices rise,” Oyedele said.
He added that the proposed tax would only be implemented when economic conditions and income levels made it possible for Nigerians to accommodate the additional expense.
“At the appropriate time, when the economy has stabilised and income level will be able to accommodate it, those taxes will come. Not because we want to impose taxes,” the minister stated.
The announcement indicates that the government is considering additional revenue measures linked to fuel consumption, although Oyedele did not specify an implementation date or disclose the proposed tax rate.
For now, the timing of the proposed fuel tax will depend on the government’s assessment of economic stability and the ability of Nigerians to bear the additional cost.
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