• Consumers decry new fuel tax after subsidy removal as law begins Jan. 2026

The Federal Government may rake in N796bn annually from the introduction of a five per cent surcharge on locally produced and imported petrol, based on its new tax policy slated to take effect from January 1, 2026.

The five per cent surcharge on refined petroleum products is contained in the Nigeria Tax Administration Act, one of four tax reform bills signed into law by President Bola Tinubu on June 26, 2025. Our correspondent obtained a copy of the Act on Wednesday.

However, consumers have opposed the move, stressing that the government had earlier removed fuel subsidies and now plots to impose a five per cent surcharge on fuel, without considering the harsh economic realities nationwide.

This came as oil marketers stated that the five per cent surcharge may further hike the pump prices of refined petroleum products.

The surcharge forms part of government efforts to shore up non-oil revenues and promote fiscal sustainability amid mounting public debt and subsidy-related costs. The policy targets fossil fuel products provided or produced in Nigeria.

Fossil fuel products include petrol, diesel, kerosene, aviation fuel, and Compressed Natural Gas, among others. They are derived from the processing of fossil fuels such as coal, petroleum, and natural gas.

However, items exempted from the new tax are clean or renewable energy products, as well as household kerosene, cooking gas, and Compressed Natural Gas.

Findings by The PUNCH showed that the government would garner about N796bn annually from only petrol once the five per cent surcharge takes effect.

An analysis by our correspondent, using the volume of imported and refined petrol, showed that the government could earn N796bn based on the 2024 estimates of national consumption and refining capacity production data provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

This N796bn is purely for petrol and doesn’t include other fossil fuel derivatives such as diesel and aviation fuel.

A breakdown of data from the NMDPRA shows that the total volume of petrol consumed by Nigerians reached 18.75 billion litres in 2024. NMDPRA, an agency of the Federal Government, is the mid- and downstream regulator of the oil and gas industry.

The 18.75 billion litres of petrol translates to about N15.93tn, using the average price of N850 for a litre of petrol consumed in Nigeria during the review period. Five per cent of N15.93tn represents N796bn, which is the sum that the Federal Government may rake in annually from only petrol once it implements the planned surcharge.

This, therefore, implies that the government’s earnings from the proposed surcharge on fossil fuel products (petrol, diesel, and aviation fuel) would be more than N796bn once the five per cent surcharge policy on refined petroleum products takes effect, after being approved by the Minister of Finance, as stated in the Act.

According to the law, the surcharge will be imposed on all “chargeable fossil fuel products” and will be calculated based on the retail price of the product. The Act stipulates that the surcharge will apply to a “chargeable transaction” such as the supply, sale, or payment for the product, “whichever occurs first”.

The law read in part, “A surcharge is imposed at five per cent on chargeable fossil fuel products provided or produced in Nigeria, and shall be collected at the time a chargeable transaction occurs.

“(1) For the purpose of imposing a surcharge on fossil fuel products, the chargeable transaction shall be the supply, sale, or payment, whichever occurs first. (2) Surcharge shall be computed based on the retail price of all chargeable fossil fuel products.”

The implementation date, however, remains undecided and is now subject to the approval of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. “The minister may, by an Order issued in the Official Gazette, indicate the effective date of commencement of the administration of the surcharge on fossil fuel products under this Chapter,” the Act said.

“The Service shall administer and collect the surcharge every month and may issue regulations for its administration,” a section of the Act reads. A surcharge is an additional fee or tax added to the price of a good or service beyond the base price.

The law tasks the Federal Inland Revenue Service, which will be renamed the Nigeria Revenue Service by 2026, with administering and collecting the surcharge every month. It also empowers the agency to issue further regulations for effective implementation.

It further stated, “The surcharge under this Chapter shall not apply to the following fossil fuel products: (a) clean or renewable energy products; (b) household kerosene; (c) cooking gas; and (d) Compressed Natural Gas.

“(2) For the purpose of this section, ‘clean or renewable energy’ means energy from solar, wind, hydropower, geothermal, or plant and animal waste, which are naturally replenishing, produce little or no environmental pollution or greenhouse gas emissions, and do not deplete over time.”

The Nigeria Tax Act is one of four tax laws signed into law by President Tinubu to overhaul the country’s tax framework. The others include the Joint Revenue Board (Establishment) Law, the Nigeria Revenue Service (Establishment) Act, and the Nigeria Tax Administration Act.

The laws are aimed at enhancing revenue collection efficiency, promoting fiscal transparency, and supporting the implementation of Nigeria’s medium-term revenue strategy.

With rising government borrowing and growing fiscal pressures, the surcharge is expected to form part of new efforts to boost non-oil revenue, though its real impact will depend largely on how and when it is implemented.

Consumers kick

However, marketers, transport workers, farmers, human rights advocates, and civil society groups across Nigeria have raised opposition to the proposed implementation of the five per cent users’ charge on petrol and diesel pump prices.

The National Chairman of the Joint Drivers Welfare Association, Akintade Abiodun, accused the government of using Nigerians as “lab rats” for unpopular economic decisions.

The Association of Nigerian Refineries Petroleum Marketers also raised an alarm recently over the Federal Government’s plan to enforce a five per cent user charge on fuel pump prices through the Federal Roads Maintenance Agency, warning of severe operational and economic consequences for marketers and consumers.

The association’s National Chairman of the Board of Trustees, Usman Ali, disclosed this at a press conference. The association acknowledged the past failures of the subsidy system, which it described as riddled with corruption, inefficiency, and massive fiscal leakages.

It warned that the removal of the subsidy must be matched with robust regulatory frameworks to avoid a resurgence of malpractice in the downstream sector. The association called for digital tracking systems, transparent procurement procedures, and effective enforcement to improve accountability and reduce losses

The association, however, expressed conditional support for the proposed levy, stating that while improving Nigeria’s road infrastructure was necessary, the charge must be implemented with caution and tied to visible and immediate road rehabilitation.

“The powers that be in this country are taking us for a ride. They think we won’t react just because we were quiet the last time they increased fuel. Now they want to add another cost on top of the already expensive pump price. This must be reversed,” he said.

On its part, the Chancellor of the International Society for Social Justice and Human Rights, Jackson Omenazu, chided the government for pursuing policies that are “anti-people.” He warned that growing public frustration could explode if authorities continue to ignore the sufferings of citizens.

Omenazu said, “How can lawmakers sit in the comfort of their offices, after increasing their own allowances, to approve policies that will send poor Nigerians to early graves? What kind of leadership is this?

IPMAN reacts

The Independent Petroleum Marketers Association of Nigeria has warned that the five per cent surcharge on petroleum products may lead to an increase in the pump price of fuel across the country.

The association explained that although the new levy would be factored into the pre-pricing structure by industry players such as refineries and marketers, the financial impact would eventually be transferred to consumers.

National Publicity Secretary of IPMAN, Chief Chinedu Ukadike, who spoke in an interview with The PUNCH on Wednesday, said the development could complicate Nigeria’s already fragile downstream pricing environment.

“The only implication is that industry players like the refineries will add it to their pre-pricing costs, but not post-pricing costs,” Ukadike said. “But indirectly, it would also lead to an increase in the pump price.” He said the association is closely monitoring how the policy will be implemented.

According to him, “Any additional charge on the cost of importation or refining of petroleum products will, by extension, reflect in the final retail price. This is because marketers operate on thin margins and cannot absorb such levies without a ripple effect.”

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Importers have dropped petrol prices below the price offered by the Dangote Petroleum Refinery, sparking a new wave of competition. This comes amid a call by the President of the Dangote Group, Alhaji Aliko Dangote, for the Federal Government to ban fuel importation.

Findings by our correspondent showed that some filling stations now sell petrol below N860 per litre, while Dangote partners, such as MRS, Heyden, and others, sell at N865 or N875 in Lagos and Ogun States.

A filling station named SGR in Ogun State reduced its price to N847 per litre as of Tuesday. Marketers confirmed to The PUNCH that most importers have reduced their ex-depot petrol prices below that of the Dangote refinery.

As of Tuesday, it was learnt that Dangote refinery was selling petrol at N820 per litre while some depots sold the product at N815 per litre. According to Petroleumprice.ng, Aiteo, Menj and others put their prices at N815/litre as of Tuesday.

Our correspondent learnt that the importers were making efforts to remain in business through competitive pricing. Many had previously complained of recording losses when the 650,000-barrels-per-day capacity Dangote refinery began implementing constant price cuts earlier this year.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, confirmed the ongoing downward price review by the importers.

“Depot owners are dropping their petrol prices. Some of them are selling N815, some are selling N817, while Dangote is selling N820. NNPC is still selling at N825; it has not dropped its prices yet,” Ukadike disclosed.

He described this as the beauty of market liberalisation, saying President Bola Tinubu should not heed calls to ban fuel importation.

“This is the beauty of the liberalisation of the market. That is why we opined that the President should not ban anybody from importing petroleum products. Nobody should be stopped from bringing in petroleum products. That is the beauty of opening up the market. Implementation and local refining will checkmate unfair pricing. As an indigenous country, you must refine to ensure that you have the best price,” Ukadike said.

On claims that toxic and substandard fuels are being imported into the country, the IPMAN spokesman said the Nigerian Midstream and Downstream Petroleum Regulatory Authority is in place to check substandard fuels.

Today, it appears that importers are daring Dangote by leading the charge in slashing petrol prices, a practice Dangote recently described as unfair competition. According to Dangote, the importation of fuel into Nigeria is killing local refining and discouraging further investments in the sector and even the economy.

To remain viable, he urged governments across Africa to take deliberate steps as the United States, Canada, and the European Union have done to protect domestic producers from what he called unfair competition.

Dangote did not mince words when he said that the Nigeria First policy announced by Tinubu should apply to the petroleum products sector. “The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors,” he stated.

This request by Dangote seeks to place a ban on the importation of petrol, diesel, and other products being produced locally. He argued that local refiners were finding it difficult to sell their products because of what he called dumping. The billionaire businessman alleged that importers were dumping toxic fuel that would never be allowed in Europe.

“And to make matters worse, we are now facing increased dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America,” he said.

Dangote mentioned that some importers bring subsidised fuel or crude oil from Russia into Nigeria. This, he said, affects local pricing, forcing refiners to lower their prices below production cost.

“Due to the price caps on the Russian petroleum products, discounted petroleum products produced in Russia or with discounted Russian crude find their way to Africa, severely undercutting our local production, which is based on full crude pricing. This has created an unlevel playing field in most African countries. Petrol and diesel are sold for about a dollar net of taxes.

“In Nigeria, due to this unfair competition, this price is just about 60 cents, even cheaper than Saudi Arabia, which produces and refines its own oil. This is due to the fact that we are having too much dumping. To remain viable, we urge the governments across Africa to take deliberate steps as the United States, Canada, and the European Union have done to protect domestic producers from unfair competition,” he stated at a recent event organised by the Nigerian Upstream Petroleum Regulatory Authority in Abuja.

However, marketers disagreed with Dangote, urging the Federal Government not to consider adding petroleum products to the list of items banned from importation under the ‘Nigeria First’ policy.

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President Bola Tinubu has directed the immediate employment of 200 National Youth Service Corps (NYSC) honorees into the federal civil service.

The President speaking on Tuesday also announced ₦250,000 cash award for the 200 honorees in recognition of their outstanding service during the 2020–2023 service years.

Tinubu who was represented by the Minister of State for Labour and Employment, Nkeiruka Onyejeocha, at the combined President’s NYSC Honours Award Ceremony (2020-2023) in Abuja, celebrated the awardees for their “discipline, commitment, selflessness, teamwork, patriotism, and integrity.”

The President Tinubu also showed empathy to 10 physically challenged former corps members, who sustained varying degrees of disability while serving, directing that they should be offered federal employment and assuring them that the government will never forget their sacrifice.

He assured the honorees that the “Head of the Civil Service of the Federation and Chairman of the Federal Civil Service Commission will immediately begin their employment process.”

Beyond automatic employment and cash awards, every honoree—including those with disabilities—will receive a scholarship to pursue a postgraduate degree at any Nigerian university.

According to him: “In appreciation of their service to the nation, all the awardees will receive N250,000. Finally, each award recipient will be granted a scholarship to pursue postgraduate programs up to a degree in any university in the country,” he declared.

He reinforced the administration’s commitment to youth empowerment, saying: “In appreciation of these critical roles played by youth in national development, and to put them in the foreground of our economy, the government developed several youth-related programs, covering education, skills development, technology, and information sustainability.”

He called on the honorees and Nigerian youths alike “to continue to have faith in Nigeria,” urging them not to yield to those “seeking to destabilize the nation.”

The ceremony recognized the best overall performers among both male and female awardees.

The top four male awardees were: Nunaya Polycarp Nunaya (20B – KW/20B/0001) from Adamawa State, who served in Kwara State; Okpogbo Alvin Chinedu (21A) from Imo State, who served in Cross River State; Dr. Ugwa Obinna Mark (23B) from Abia State, who served in Cross River State and Rabiu Quadri Mayokun (23C) from Osun State, who served in Rivers State.

In the female category, the best overall awardees were: Akase Pati Ence Nguwasen (21A) from Benue State, who served in Gombe State and Igwe Anne Chikaodi (23C) from Enugu State, who served in Sokoto State.

Minister of Youth Development, Ayodele Olawande, lauded President Tinubu’s unwavering commitment to the future of Nigerian youth.

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