The Federal Government has defended its proposed 5 percent fuel surcharge, assuring Nigerians that the measure is designed to rehabilitate the country’s failing road network rather than impose fresh hardship on citizens.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, gave the clarification on Tuesday during an interview on Channels Television’s Morning Brief.
Oyedele admitted that concerns about inflation are valid but stressed that the long-term benefits of improved road infrastructure outweigh the short-term cost implications.
“I know everybody is concerned about the impact on inflation; I’m concerned myself,” he said. “But around the world, road infrastructure is very important. Nigeria has about 200,000 kilometres of road, and only about 60,000 are okay. This is a major reason why transporting goods and people is costly and unsafe.”
The 5 percent surcharge, contained in the newly enacted Nigeria Tax Act 2025, is slated to take effect from January 2026. However, the policy has already stirred anxiety, with the Trade Union Congress (TUC) threatening a nationwide strike within two weeks unless the levy is dropped.
Oyedele explained that the fuel surcharge is not a novel idea, having first been introduced in 2007 but suspended due to fuel subsidies. With subsidies now removed, he said the government must find additional revenue sources to close its widening infrastructure gap.
“Even with the removal of fuel subsidy, the huge gap we have in infrastructural development cannot be addressed by those revenues alone,” he noted.
To cushion inflationary effects, Oyedele revealed that implementation will be timed to coincide with favourable economic conditions—such as an appreciation of the naira or a fall in global crude oil prices—so that consumers do not feel the full impact at the pump.
He also assured that proceeds from the surcharge will be ring-fenced for road projects only, citing the success of the Road Infrastructure Tax Credit Scheme, which has enabled private firms like Dangote, NLNG, Lafarge, and MTN to deliver critical road repairs.
Oyedele urged Nigerians to keep an open mind, adding that the policy remains subject to review.
“If it can’t work, the process is there for the National Assembly to remove it from the law,” he said.