What the 5% Fuel Surcharge means for you as a Nigerian

Over the past few days, there’s been a lot of confusion and anger about the inclusion of a 5% fuel surcharge in Nigeria’s new Tax Administration Act. Many Nigerians believe President Bola Tinubu’s administration has introduced a fresh tax on petrol and diesel — but the reality is a bit more complicated.

A fuel surcharge is a small extra charge on fuel, meant for a specific purpose. In this case, it is for our roads and transport infrastructure. The goal is to lower the cost of moving goods and people, ease logistics, and ultimately help bring down inflation.

Neusroom editors, fact-checkers, and analysts have provided all that you need to know about the fuel surcharge.

The fuel surcharge is not a new tax

The 5% fuel surcharge has been in Nigerian law since 2007 under the Federal Roads Maintenance Agency (FERMA) Act. The new tax law only restates it for clarity and harmonisation, not because the government wants to start charging it right away.

When will it take effect?

Not anytime soon. Even though the new tax law begins in January 2026, the surcharge can only be enforced if the Minister of Finance issues an official order published in a government gazette. For now, no such order exists.

Speaking with reporters on Tuesday, Wale Edun, Nigeria’s minister of finance, explained that the order has not been made, partly because the current administration is aware of the current economic hardships.

This is a transformational legal document. It is important to make this distinction; the inclusion of the surcharge in the 2025 Nigeria Tax Administration Act does not mean an automatic introduction of a new tax. It doesn’t mean fresh taxation automatically,” Edun said. “There is a whole formal process involved, and as of today, no order has been issued, none is being prepared, and there is no plan. There is no immediate plan to implement any surcharge.”

“This government is fully aware of the economic pressures of the time and will not take decisions that will make things even more burdensome. Our priority is to strengthen tax governance, block revenue leakages, and improve efficiency rather than just levy new taxes, charges, and costs.”

Will it affect all fuels?

No. Everyday cooking fuels like kerosene, LPG (cooking gas), and CNG are exempt. Renewables are also excluded, so the focus is mainly on petrol and diesel.

Why does the government want this surcharge?

The fuel surcharge is meant to create a dedicated fund for road maintenance and transport infrastructure. Supporters argue that better roads will reduce travel time, lower logistics costs, and even cut down on vehicle repairs. Nigeria’s tax committee chair, Taiwo Oyedele, writes that “This practice is virtually universal with over 150 countries imposing various charges ranging between 20% to 80% of fuel products to guarantee regular investment in road infrastructure.”

Why not just scrap it?

Government officials say Nigeria’s massive road infrastructure needs can’t be met with subsidy savings or budget allocations alone. More than 150 countries already add levies on fuel for road funding.

Why are people worried?

Nigerians are already struggling with high inflation, transport costs, and rising prices since the removal of fuel subsidy in 2023. Many fear that when (or if) the surcharge is implemented, it will make living costs even worse.

Labour Party presidential candidate in the 2023 election, Peter Obi, called out the federal government over the 5% tax on all fossil fuel sales last week. “When will Nigerians truly breathe? A timely and relevant question, as a new 5% tax on all refined fossil fuel sales, including petrol and diesel, has just been announced by the Federal Government. That is, Nigerians will pay a 5% tax when buying their everyday fuel or diesel at a time when millions can hardly even afford the cost of transportation,” he wrote on X.

The Bottom Line

The 5% fuel surcharge is not new; it’s not being charged now, and it won’t automatically start in 2026. But it’s still in the law, waiting for the government to decide when the right time is to enforce it.

For everyday Nigerians, this means no extra cost at the pump — at least for now.