5% Fuel Surcharge Meant for Fixing Bad Roads- FG

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has explained that the proposed 5% fuel surcharge is designed to raise funds for Nigeria’s failing road network, not to increase hardship on citizens. Speaking on Channels Television, he said better roads would ease transport costs and help tame inflation.

Oyedele acknowledged fears that the surcharge, which takes effect in January 2026 under the Nigeria Tax Act, might worsen inflation. However, he linked the high cost of goods directly to bad roads, noting that Nigeria’s rural-urban food price gap often reaches 5%, compared to less than 1% in most countries.

He clarified that the levy was first introduced in 2007 but shelved due to fuel subsidies. With subsidies gone, Oyedele argued that alternative funding is vital to close the nation’s huge infrastructure gap. He added that the surcharge could be timed with favourable currency or crude oil movements to minimize impact on pump prices.

The reform chief stressed that proceeds from the surcharge would be ring-fenced for road projects, pointing to the success of the Road Infrastructure Tax Credit Scheme as proof that such interventions can deliver results.