5% fuel surcharge will not begin in January 2026 – FG

The Federal Government has clarified that the proposed 5% surcharge on fuel will not take effect automatically in January 2026.

This follows concerns raised following the signing of the Harmonised Tax Act into law.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, made the clarification in a statement posted on his official X page on Saturday.

According to earlier reports, Nigerians might have to pay an additional 5% tax on every litre of fuel from January 2026, as stipulated under the new tax law signed by President Bola Tinubu.

However, Oyedele dismissed the reports, insisting that the surcharge will not commence at that date.

“It will only commence when the Minister of Finance issues an order published in the Official Gazette as stated under Chapter 7 of the Nigeria Tax Act, 2025,” he explained.

“This safeguard ensures careful consideration of timing and economic conditions before implementation.

“The charge is not a new tax introduced by the current administration. The provision already exists under the Federal Roads Maintenance Agency (Amendment) Act, 2007.

“Its restatement in the new Tax Act is for harmonisation and transparency rather than immediate implementation.”

Oyedele also stressed that the surcharge was not introduced by Tinubu’s government, noting that it had been in place since 2007.

“The new Tax Act only restates it for harmonisation and transparency. Hence, it was not part of the original tax reform bills submitted by the president to the National Assembly,” he said.

He further clarified that the surcharge will not apply to all fuel products. Household kerosene, cooking gas (LPG), compressed natural gas (CNG), and clean renewable energy products are exempt in line with Nigeria’s energy transition agenda.

Addressing why the surcharge is retained despite economic hardship, Oyedele explained that it is designed as a dedicated fund for road infrastructure.

“If implemented effectively, it will provide safer travel conditions, reduce travel time and cost, lower logistics costs and vehicle maintenance expenses, which will benefit the wider economy,” he said.

He added that more than 150 countries currently impose similar charges ranging between 20% and 80% of fuel costs.

Oyedele dismissed suggestions that savings from fuel subsidy removal could be enough to fund road projects, stressing that they fall short of meeting the country’s infrastructure needs.

“A dedicated fund ensures reliable and predictable financing for roads, complementing the budget and ensuring roads are not left underfunded,” he said.

He also insisted that the ongoing reforms align with the government’s commitment to easing tax pressures.

“The reforms have already reduced multiple taxes and removed or suspended several charges that directly affect households and small businesses, such as VAT on fuel, excise tax on telecoms, and the cybersecurity levy,” he stated.

According to him, the fuel surcharge has been taken out of the FERMA Act and placed under the new tax laws to establish a more sustainable legal structure.