The Federal Government has defended its planned 5% fuel surcharge, insisting that the measure is aimed at raising funds to rehabilitate Nigeria’s decaying road network rather than adding to the burden of citizens.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made this clarification on Tuesday while appearing on Channels Television’s Morning Brief.
According to him, while concerns about inflation are valid, the long-term benefits of improved road infrastructure would outweigh initial fears.
“I know everybody is concerned about the impact on inflation; I’m concerned myself,” Oyedele admitted. “But around the world, road infrastructure is very important. Out of Nigeria’s 200,000 kilometres of roads, only about 60,000 are in good condition. This is one of the major reasons transportation of goods and people remains expensive and unsafe.”
The surcharge, which forms part of the newly enacted Nigeria Tax Act 2025, is scheduled to take effect in January 2026.
Its announcement has, however, sparked criticism and triggered a strike threat from the Trade Union Congress, which has given the government two weeks to scrap the tax.
Oyedele explained that the idea of the surcharge is not new, noting that it was first introduced in 2007 but could not be enforced at the time because fuel subsidies were still in place.
He added that revenue freed up from subsidy removal alone cannot close Nigeria’s vast infrastructure deficit. “Even with subsidy removal, the huge gap in infrastructural development cannot be addressed by those revenues alone,” he said.
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To cushion the impact, he suggested that the surcharge could be introduced at periods when the naira appreciates or when global crude prices fall, so that the effect on fuel pump prices is less noticeable.
Oyedele also assured that the surcharge would be ring-fenced and strictly used for road projects.
He pointed to the success of the Road Infrastructure Tax Credit Scheme, which has seen private companies like Dangote, NLNG, Lafarge, and MTN finance key roads under government supervision.
“There’s nothing that says we can’t have a similar arrangement to ensure this money is efficiently utilised,” he added.
He further urged Nigerians to give the policy a chance, stressing that if it fails to deliver on its promise, the National Assembly retains the power to review or scrap it.