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FG eyes N796bn annually from 5% petrol surcharge

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• 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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Reps to mediate in PENGASSAN, Dangote refinery dispute

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The House of Representatives on Tuesday resolved to intervene in the recent face-off between members of the Petroleum and Natural Gas Senior Staff Association of Nigeria and the Dangote Refinery, which had disrupted petroleum product distribution nationwide.

The resolution of the House followed the consideration and adoption of a motion of urgent public importance co-sponsored by Kano and Sokoto lawmakers, Alhassan Doguwa and Abdussamad Dasuki, respectively, at Tuesday’s plenary.

Titled: “Need to protect private investment from adversarial unionism,” the lawmakers drew the attention of their colleagues to the significance of the Dangote Refinery, describing it as the largest private petroleum refinery in Africa.

The face-off between PENGASSAN and the Dangote Refinery led to an industrial action which commenced on September 29, 2025, disrupting the operations at the $20bn refinery.

It also led to a disruption in Nigeria’s crude oil production, with a reported daily loss of approximately 200,000 barrels over three days.

The disruption worsened the petroleum supply situation across the country, resulting in scarcity and long queues at filling stations in several states, resulting in severe hardship for millions of Nigerians.

Speaking on the motion, Doguwa, who represents Doguwa/Tudun Wada Federal Constituency, Kano State, stressed the need to protect the Dangote Refinery given its strategic significance to the nation’s economy.

He said, “The House is aware that the Dangote Refinery is a strategic private investment of immense national importance, with the potential to guarantee energy security, reduce import dependency, generate employment, and conserve foreign exchange.

“We are aware that the Dangote Refinery operates within a Free Trade Zone, and therefore falls under the regulatory framework of the Nigeria Export Processing Zones Authority, particularly Section 18(5) of the Nigeria Export Processing Zones Act which clearly states that ‘Employment in the free zone shall be governed by rules and regulations made by the Authority and not subject to the provisions of any enactments relating to employment matters.’

“The House is concerned that actions by labour unions that disregard the legal protections conferred on Free Zones under the NEPZA Act not only constitute a breach of law but also create a hostile investment environment that may deter future local and foreign investors;

“We are worried that if private investments of strategic national importance are continually subjected to unlawful disruptions by adversarial unionism, Nigeria risks not only the failure of key economic assets but also the erosion of investor confidence necessary for national growth and development.”

In his contribution, the member representing Chibok/Damboa/Gwoza Federal Constituency, Ahmad Jaha, urged the House to tread carefully, adding that the call for a probe as prayed by the motion was ill-timed.

Following the adoption of the motion, the House urged its leadership to broker peace between the two parties in the interest of the nation.

It also urged the Federal Ministries of Labour and Employment, Industry, Trade and Investment, as well as Justice, to “Jointly develop and implement a national framework or set of policies to safeguard private investments of strategic national importance from adversarial and unlawful union actions.”

It further charged the Federal Ministry of Justice and NEPZA to ensure full enforcement and compliance with the provisions of Section 18(5) of the Nigeria Export Processing Zones Act in all relevant Free Zone operations.

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Debt dispute: Drama as Max Air pilot refuses to fly

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Drama unfolded at Maiduguri International Airport on Monday as over 100 Max Air’s passengers of were left stranded for hours due to a face-off between the airline’s pilots and management over unpaid debts.

The incident caused panic and confusion among travellers who had already boarded the aircraft and were awaiting departure.

According to an eyewitness who refused to give her name for fear of the unknown, the pilots refused to proceed with the flight, which the flight attendants blamed solely on the pilot’s unpaid entitlements.

This shocking development held the scheduled airline to ransom for some hours, sparking tension among the passengers, with the development forcing them to disembark in frustration after being informed of the dispute and refusal of the pilot to fly.

Another eyewitness who gave his name simply as Shola told The PUNCH that the pilots were protesting unresolved financial issues with the airline.

The traveller who was aboard the affected flight confirmed that boarding had been completed when the airline staff members suddenly instructed passengers to leave the aircraft and return to the terminal.

“We had all taken our seats and were waiting to take off when they asked us to disembark,” the source said.

According to the same source, passengers waited for several hours in uncertainty before the matter was eventually resolved.

“There was tension initially, but after some time, we were told the issue had been settled. We were later asked to re-board the aircraft,” the traveller said.

Confirming the development, the Director of Public Affairs and Consumer Protection at the Nigeria Civil Aviation Authority, Michael Achimugu, confirmed the incident, adding that the dispute appeared to have been resolved amicably by both parties without regulatory intervention.

“The flight later departed around past 2:00 pm, which means the issue was resolved. Since it was an internal matter, and the aircraft eventually flew, we consider it closed.”

The NCAA spokesman said. “We typically don’t intervene in salary-related disputes unless a formal report is submitted.”

He further emphasised that while the NCAA regulates safety and operational standards, issues such as wage disputes between staff and management are typically handled internally by the airline unless safety is compromised.

Max Air’s Executive Director, Shehu Wada, also confirmed the development, describing it as a result of miscommunication.

“It is a communication gap issue, and it has been resolved. That is how I can describe it basically,” he said.

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Petrol tops Nigeria’s imports with 613.6m litres in one year

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Nigerians consumed a total of 613.62 million litres of Premium Motor Spirit, popularly known as petrol, for transportation, power generation, and other domestic uses between October 2024 and October 10, 2025.

This is according to fresh data obtained from the Nigerian Midstream and Downstream Petroleum Regulatory Authority obtained by our correspondent on Monday in Abuja.

Despite the ramp-up in operations at the Dangote Petroleum Refinery and other local plants, imported petrol still accounted for a larger share of the country’s total fuel supply during the period under review.

Out of the total 613.62 million litres of Premium Motor Spirit consumed between October 2024 and October 10, 2025, the NMDPRA data revealed that 236.08 million litres were supplied by domestic refineries, while 377.54 million litres came through imports.

The figures indicate that imported petrol still accounted for the bulk of Nigeria’s fuel needs within the period, with imports dominating supply, contributing about 63 per cent of Nigeria’s PMS needs.

While local refineries, led by the 650,000-barrels-per-day Dangote Refinery, provided the remaining 37 per cent, marking a significant improvement from the previous year’s levels.

The NMDPRA data further indicated that domestic production rose steadily from 9.62 million litres per day in October 2024 to 18.93 million litres per day by October 2025, showing a near 100 per cent increase within the one-year period.

Conversely, import volumes declined sharply from 46.38 million litres per day in October 2024 to 15.11 million litres per day in October 2025, reflecting a 67 per cent drop.

A monthly breakdown of the data revealed a steady decline in petrol importation and a gradual rise in local supply. Import volumes dropped from 46.38 million litres in October 2024 to 36.39 million litres in November and 38.90 million litres in December.

By January 2025, import figures had fallen further to 24.15 million litres, and though there were slight fluctuations in subsequent months – 26.79 million litres in February, 25.19 million litres in March, and 23.73 million litres in April – imports rebounded temporarily to 37.37 million litres in May.

Thereafter, volumes declined again, with 28.54 million litres imported in June, 35.07 million litres in July, 20.66 million litres in August, 19.26 million litres in September, and a year-low of 15.11 million litres as of October 10, 2025.

In contrast, domestic refining output showed notable improvement within the same period, rising from 9.62 million litres in October 2024 to 19.36 million litres in November and 13.13 million litres in December.

The upward trend continued into 2025, with local supply climbing to 22.66 million litres in January and 22.42 million litres in February and maintaining over 20 million litres in both March (20.65 million litres) and April (20.35 million litres).

Though there were minor dips to 17.85 million litres in May, 17.82 million litres in June, and 16.50 million litres in July, output surged again to 21.19 million litres in August before stabilising at 18.93 million litres in October 2025.

The figures reflect a gradual but significant shift in Nigeria’s fuel supply structure, with local refineries, particularly the Dangote Petroleum Refinery, steadily closing the gap on imports within just one year of operation.

The document further showed that total petrol supply averaged 46.6 million litres per day, comprising 29.5 million litres from imports and about 17.1 million litres from local production.

The reduction in petrol imports has also eased pressure on Nigeria’s foreign reserves, as the country spends less on importing refined products. Previously, importers required billions of dollars monthly to settle letters of credit and cover freight and insurance costs.

However, the report noted fluctuations in overall supply, with volumes dipping from 55.21 million litres in May 2025 to 34.04 million litres in October 2025, a sign that logistical constraints and periodic maintenance still affect consistent nationwide distribution.

Oil and gas analysts say the improvement coincides with the first full year of operations of the Dangote Refinery, which began large-scale production earlier in 2025 and now contributes between 15 and 20 million litres of PMS daily to the domestic market.

Since its commissioning in May 2023 and subsequent ramp-up through 2024, the Dangote Refinery has been under global scrutiny as the flagship of Nigeria’s industrial revival agenda.

In its first year of sustained operation, the refinery’s growing output has reshaped Nigeria’s fuel supply structure, reduced foreign exchange exposure, and rekindled confidence in local refining after decades of failed turnarounds at the government-owned Port Harcourt, Warri, and Kaduna refineries.

Commenting, the Chief Executive Officer of Petroleum.ng, Olatide Jeremiah, said that Nigeria’s domestic refining capacity has recorded remarkable progress in the past year, with the Dangote Refinery now supplying about 40 per cent of the country’s daily petrol consumption.

Speaking in reaction to new supply data released by the NMDPRA, the analyst said the progress underscores the growing impact of local refineries on Nigeria’s energy security.

He, however, stressed that the Dangote Refinery and other local refiners require uninterrupted access to crude oil in naira to scale up production and reduce pump prices nationwide.

“The fact that import remains the country’s major source of refined products shows that there are still unresolved issues. In the last year, domestic supply championed by Dangote Refinery has made tremendous progress with about 40 per cent of our daily consumption. Dangote Refinery needs 100 per cent access to crude in naira to increase domestic supply and drive down prices at the pump,” he said.

He lamented that despite being Africa’s biggest crude oil producer and host to the continent’s largest refinery, Nigeria still imports about 60 per cent of its daily petrol needs, a situation he described as inconsistent with the country’s energy potential.

The Petroleum.ng chief urged the Federal Government and the Nigerian Upstream Petroleum Regulatory Commission to strengthen policies that guarantee local refineries full access to domestic crude supply.

“Nigeria, the biggest producer of crude in Africa with the biggest refinery in Africa, should not be importing about 60% of its daily fuel consumption; thus, our pump prices should be amongst the lowest in the world.

The FG, through NUPRC, should continue to formulate frameworks that would allow local refiners access to crude 100 per cent. For me, that’s the recipe for availability and affordability,” he added.

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