The proposed 5% fuel surcharge will not take effect until Nigeria’s economic conditions improve—specifically, when the naira appreciates or global crude oil prices decline.
This clarification was made by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during the Haulage and Logistics Magazine Conference & Exhibition in Lagos.
Oyedele explained that although the surcharge is a sound policy aimed at funding road maintenance, introducing it now would further burden Nigerians already dealing with rising costs.
Originally introduced under former President Olusegun Obasanjo, the surcharge was designed to allocate a portion of fuel revenue to road repairs—40% for federal roads and 60% for state and local government roads.
“The idea is brilliant and already practiced in over 150 countries,” he said, noting that most of Nigeria’s 200,000 kilometres of roads remain in poor condition.
He also revealed that the Federal Roads Maintenance Agency (FERMA) had requested to begin collecting the levy shortly after fuel subsidy removal, but the committee strongly opposed the move.
“We said no—introducing such a tax now would be insensitive,” Oyedele emphasized.
Although the surcharge appears in the draft tax legislation, it includes an important safeguard: it cannot be activated without an official order from the Minister of Finance.
“For me, the right time is when the naira recovers or crude oil prices fall, so the surcharge won’t push fuel prices higher,” he added.
Oyedele further assured stakeholders that ongoing tax reforms will significantly ease the burden on the haulage and logistics sector by eliminating multiple taxation, reducing operating costs, and improving overall efficiency.
“We are not introducing new taxes; we are removing the many duplicated ones that frustrate transporters and raise prices,” he said.
Under the new policy, small transport and logistics businesses with an annual turnover below ₦100 million will be exempt from company income tax. Eligible operators will also enjoy VAT refunds and other tax incentives.
He added that the reforms aim to simplify Nigeria’s complicated tax structure and ensure transparent, efficient revenue sharing across all levels of government.
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