Chairman of the Presidential Committee on Fiscal Policies and Tax Reforms, Professor Taiwo Oyedele, has clarified that the new 5% surcharge tax on petrol was not introduced by the President Bola Tinubu-led administration. Oyedele insisted that the provision was part of the Federal Roads Maintenance Agency (Amendment) Act, 2007, adding that its restatement in the new Tax Act is for harmonisation and transparency rather than immediate implementation.

He made this clarification on his X (formerly Twitter) page, assuring that some petroleum products such as household kerosene, CNG, LPG and renewable products are exempt from the new tax in line with Nigeria’s energy transition plan.

“The surcharge is not new. It already exists under the Federal Roads Maintenance Agency (Amendment) Act, 2007 (FERMA Act). The new Tax Act only restates it for harmonisation and transparency. Hence, it was not part of the original tax reform bills submitted by the president to the National Assembly,” Oyedele said.

On the commencement date for the new surcharge tax, Oyedele said the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, will decide that, refuting the rumours making the rounds that the surcharge took effect immediately.

“The surcharge does not take effect automatically with the new tax laws. It will only commence when the Minister of Finance issues an order published in the Official Gazette as stated under Chapter 7 of the Nigeria Tax Act, 2025. This safeguard ensures careful consideration of timing and economic conditions before implementation,” he added.

He listed the products exempt from the new surcharge to include household kerosene, cooking gas (LPG), compressed natural gas (CNG), clean and renewable energy products in line with Nigeria’s energy transition agenda.

While Nigerians are agitating for the cancellation of the new surcharge tax, Oyedele said the tax was provided for to address perennial insufficient funds for road maintenance in Nigeria, arguing that it is a universal practice in over 150 countries across the world where the rate ranges from 20% to 80% in some countries.

Oyedele said the surcharge was designed as a dedicated fund for road infrastructure and maintenance, assuring that if implemented objectively, it will provide safer travel conditions, reduce travel time and cost, and lower logistics costs and vehicle maintenance expenses, which will benefit the wider economy. He added that the surcharge guarantees regular investment in road infrastructure.

On funds gained from subsidy removal, Oyedele said these cannot adequately address the resources needed to maintain standard road infrastructure that will propel the Nigerian economy to a $1 trillion economy in a not-too-distant future.

“The reforms have already reduced multiple taxes and removed or suspended several charges that directly affect households and small businesses, such as VAT on fuel, excise tax on telecoms, and the cybersecurity levy. By harmonising earmarked taxes, the government is reducing duplication and ensuring a more efficient tax system,” Oyedele said.