From January 2026, Nigerians buying petrol may pay an extra ₦45 per litre if the current price of ₦900 remains unchanged.
The increase will come from a new 5% surcharge introduced in the 2025 Nigeria Tax Administration Act, one of four tax reform laws signed by President Bola Tinubu on June 26, 2025.
The law targets fossil fuel products such as petrol, diesel, aviation fuel, and kerosene. The surcharge is designed to push Nigeria toward cleaner energy options and broaden government revenue.
The Act states: “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.”
It further explains that a chargeable transaction could be the supply, sale, or payment for the product — “whichever occurs first.”
Exemptions include household kerosene, cooking gas, Compressed Natural Gas (CNG), and renewable energy products such as solar or wind power.
The surcharge will be collected monthly by the Federal Inland Revenue Service, which will be renamed the Nigeria Revenue Service in 2026. The Minister of Finance, Wale Edun, is expected to announce the final implementation date.
Marketers Say Consumers Will Pay
Industry players warn that the burden will end up on ordinary Nigerians. Billy Gillis-Harry, National President of PETROAN, explained that fuel marketers cannot absorb the extra cost.
He said, “The consumer will certainly be the final person to pay the 5 percent. So, whether we like it or not, that will be increasing the fuel price.”
Gillis-Harry recalled that when the surcharge was first discussed in 2007, it amounted to only ₦2 or ₦3 per litre. Today, at ₦850 per litre, the 5% surcharge translates to ₦42.5. “That size of money is not what the industry can accommodate now,” he warned.
Many Nigerians took to social media to criticise the new levy. Engr. Oyibo Donatus wrote, “The economy of Nigeria is getting tighter and more inflation is loading in 2026. This will be too much to bear for petroleum products we are naturally gifted with.”
Another citizen, Udofia Essien, added, “Those who imposed it will never feel the pain. Nigeria has crude oil and that entitlement should write off the tax.”
For others, the bigger fear is survival under soaring costs. Dayo Wilson lamented that petrol already sells at ₦865 per litre, diesel at ₦1,300, and CNG at ₦450. He noted that electricity tariffs, VAT, and personal income tax are all rising while the naira trades at ₦1,520 to the dollar. “Transportation is no longer a choice but a burden,” he wrote.
Government Defends the Policy
Officials insist the surcharge is part of wider reforms to modernise Nigeria’s tax system and fund infrastructure.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, explained, “The intention is to earmark and dedicate the revenue from this tax into providing transport infrastructure that can reduce the cost of transporting items, logistics and overall bring down inflation for the Nigerian people.”
Still, there is uncertainty when the surcharge will take effect, as Edun must first issue an order in the official gazette.
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