Nigerians Criticise Proposed Fuel Tax As FG Links Implementation To Economic Recovery

By Sabiu Abdullahi

The Federal Government’s plan to introduce a tax on petroleum products has triggered criticism from Nigerians, who fear the move could increase their financial burden amid rising living costs and high fuel prices.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, recently disclosed the plan, explaining that the tax would only take effect when the economy had stabilised and income levels had improved enough to accommodate the additional cost.

Speaking on the sidelines of the 2026 International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, Oyedele said revenue from the proposed levy would support road infrastructure and the development of a fuel reserve to cushion the effects of future price shocks.

He explained that implementing the tax while petrol was subsidised would have meant the government effectively paid the charge itself. Introducing it immediately after the removal of the subsidy, he added, would have placed further pressure on Nigerians.

“The objective should be that instead of trying to suppress prices, which hasn’t worked for us or for any country in the world, not one, and instead of trying to suppress prices, we should think about how to grow income faster than prices rise.

“That’s how you bring prosperity and grow the middle class, and that is exactly what we are doing, as led by Mr President himself.

“At the appropriate time, when the economy is stabilised and income levels are able to accommodate it, those taxes will come. Not because we want to impose taxes,” Oyedele said.

The proposal has revived concerns over the financial consequences of the fuel subsidy removal, particularly among small business owners who depend on petrol-powered generators because of unreliable electricity supply.

Oyedele said the proposed fuel reserve would “help moderate prices of fuel products if anything happens.” He added that the government could temporarily waive the tax during future price shocks to reduce the burden on consumers.

He also explained that the existing legal framework requires the finance minister to issue an order published in the Official Gazette before the surcharge can take effect.

“The good thing is that the law says that tax cannot come into effect until there is a gazette. There has to be an order published in the gazette by the finance minister, which means we can’t do it in secret. Plus, we have no intention of doing stuff in secret.

“At the appropriate time, it will be clear to everyone why it needed to be done, and the benefits will be clear also to every Nigerian,” he said.

The proposed levy is linked to a five per cent surcharge on chargeable fossil fuel products provided for under Nigeria’s tax framework. The framework exempts household kerosene, cooking gas, compressed natural gas and clean or renewable energy products.

On June 16, 2026, the government had dismissed reports that it was introducing fresh taxes on petroleum products following recommendations in the International Monetary Fund’s Article IV consultation report. It said the value-added tax waiver on petroleum products remained in place and that no process to activate the fuel surcharge was then under consideration.

Oyedele noted that taxes account for between 20 and 80 per cent of pump prices in some countries, while several African nations impose between six and 10 different charges on petroleum products.

He also discussed the sequence of the petrol subsidy removal and foreign exchange reforms, explaining that the government initially removed support for petrol prices before allowing the naira to adjust gradually.

“That is the reason why there was still a bit of subsidy in 2023. It was to manage that process because you need to be mindful of the impact on the people.”

According to the minister, the petrol subsidy was completely removed in October 2023, leaving no government support for either petrol prices or foreign exchange.

However, the proposal has drawn criticism from citizens who argue that the government should prioritise measures to ease the effects of existing economic pressures rather than introduce another charge.

A tailor, Niyi Osundare, said the proposed tax could worsen the difficulties faced by small businesses already struggling with high operating costs.

“Why is this government so wicked? How can anybody be thinking of putting a tax on fuel when we are complaining that a litre of fuel is selling for N1,400?

“Do you know that businesses are folding up because their owners can no longer cope with the situation?

“For instance, there is hardly any electricity for small businesses to operate, so most of us rely on generators. And then, you ask yourself, how much fuel at N1,400 per litre are you prepared to buy every day?

“We are running at a great loss, and that’s why most businesses are closing down. And somebody is talking about a fuel tax, which will automatically push up the price of fuel again.

“What is wrong with the APC government? What sort of thing is this? How can people decide that the only thing they will do to their citizens is inflict pain and more pain on them?

“This is wickedness, and Nigerians should rise up. This cannot be like the announcement that ‘subsidy is gone’, which was what brought us to where we are today.

“We are crying that we can’t afford the price of fuel as it is currently sold, and somebody is telling us that the government wants to introduce a fuel tax when the economy stabilises and people’s incomes improve. When will that be?

“Can this government ever do that? It is not possible. Since 2023, when this government came in, it has been one promise after another, and all of them have ended up bringing agony and sorrow to Nigerians.

“So, this time around, they can tell their story to the marine because we will not accept any fuel tax; it won’t happen,” he stated.

A lawyer and public affairs analyst, Kunle Onatade, also questioned the government’s plan to channel the revenue into infrastructure and a fuel reserve.

He argued that Nigerians had previously been assured that savings from the removal of the fuel subsidy would support infrastructure development, but he disputed whether the expected benefits had materialised.

“Who is deceiving who? Where is all the money made from the fuel subsidy removal? Has this government, in three years, not borrowed more than Buhari in eight years? What are we talking about?

“This fuel tax move is just another avenue for making more money available for them to steal. They don’t care about the citizens as long as they keep amassing wealth for themselves.

“These are a bunch of heartless and corrupt politicians masquerading as political leaders; they don’t care about anybody. Nigerians should not listen to them. The fuel tax will bring about more hardship for Nigerians,” he said.

Business groups have also raised concerns about the possible effects of an additional fuel charge on production expenses, transportation costs and consumer prices.

The Association of Small Business Owners of Nigeria called on the government to prioritise relief for households and businesses, warning that another fuel-related levy could further strain their finances.

While the Federal Government maintains that the tax would only be introduced when economic conditions permit, critics insist that any additional charge on petroleum products could deepen the pressure on Nigerians.