New 5% fuel surcharge targeted at road infrastructure, not inflation — FG

The Federal Government has defended the newly introduced 5% fuel surcharge, insisting it is not designed to add pressure on Nigerians but to provide a dedicated fund for fixing the country’s dilapidated road network.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, gave the clarification on Tuesday while speaking on Channels Television’s Morning Brief.

The levy, contained in the Nigeria Tax Act 2025, is expected to take effect from January 2026.

However, it has already sparked public concern over potential inflationary effects, with the Trade Union Congress (TUC) threatening a nationwide strike if the tax is not withdrawn.

Oyedele admitted concerns about inflation were valid but argued that poor roads remain one of the biggest drivers of high transport and food costs in Nigeria.

“I know everybody is concerned about the impact on inflation—I’m concerned myself.

“But we also know that road infrastructure is critical. Nigeria has about 200,000 kilometres of roads, and only about 60,000 are in good condition.

“This is a major reason why moving goods and people across the country is so costly and unsafe,” he said.

He pointed out that the gap between rural and urban food inflation can be as high as 5%—a disparity linked directly to bad roads and multiple taxes on goods in transit.

Addressing critics who questioned the surcharge after fuel subsidy removal, Oyedele explained that the levy was originally introduced in 2007 but was suspended due to subsidy payments.

He stressed that revenues freed up from subsidy removal alone are still insufficient to meet Nigeria’s huge infrastructure needs.

He assured that the surcharge would be implemented cautiously, possibly timed with favourable currency gains or crude oil price drops to cushion the effect on pump prices.

Oyedele also emphasized that all funds raised would be ring-fenced exclusively for road repairs, citing the Road Infrastructure Tax Credit Scheme—which enabled companies like Dangote, NLNG, Lafarge, and MTN to rehabilitate roads—as proof that dedicated funding works.

“If this policy doesn’t achieve its purpose, the National Assembly has the mechanism to remove it from the law.

“But we must give it a chance,” he added.