Beginning in early 2026, Nigerians face a fresh financial hurdle—a newly legislated five per cent surcharge on petrol and other refined fossil fuels. This policy, enshrined in the Nigeria Tax Administration Act signed by President Bola Tinubu in June, aims to bolster government revenue amid steep subsidy costs and growing national debt.
Fuel consumption data analyzed against current retail prices suggest the government stands to earn roughly N796 billion annually from this levy on petrol alone, excluding related products like diesel and aviation fuel. The surcharge, based on the product’s retail price at the first relevant transaction stage, will be administered monthly by the Federal Inland Revenue Service.
Although designed to promote fiscal sustainability by targeting fossil fuels, the surcharge excludes clean energy alternatives and household uses such as kerosene and LPG, reflecting a partial drive towards environmental goals.
The levy’s imminent implementation has met stiff resistance. Transport unions and fuel marketers warn the surcharge will inevitably increase fuel pump prices, burdening consumers already coping with subsidy removals and economic hardship.
Akintade Abiodun, National Chairman of the Joint Drivers Welfare Association, sharply criticized the government’s decision, calling Nigerians “lab rats” for “unpopular economic decisions.”
Similarly, Usman Ali, National Chairman of the Association of Nigerian Refineries Petroleum Marketers, pointed out the need for strong oversight mechanisms to accompany the surcharge, emphasizing that prior subsidy removal exposed the system’s corruption and inefficiencies.
Human rights activist Jackson Omenazu condemned the policy as insensitive to public suffering and criticized lawmakers who approved it after raising their allowances.
IPMAN’s spokesperson Chief Chinedu Ukadike confirmed the surcharge will increase pre-pricing costs for refineries and marketers, thereby pushing pump prices upward.
The law allows the Minister of Finance discretion regarding the official commencement date, making the policy’s immediate impact uncertain. The surcharge forms part of four tax bills targeting a more efficient and transparent tax architecture to fund public projects and reduce dependence on volatile oil revenues.