The Nigerian government has reassured the public that the 5% fuel surcharge mentioned in the latest tax legislation is not a new levy. The charge was originally introduced under the Federal Roads Maintenance Agency (FERMA) Act of 2007 and has now been incorporated into the updated Nigeria Tax Act for clarity and legal consistency.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, explained that the move is aimed at harmonizing tax provisions rather than imposing immediate charges on citizens.

“This surcharge is not new; it has existed under the FERMA Act since 2007,” Oyedele said. “Its appearance in the new tax law is meant to improve transparency and coordination, not to create a new financial burden.”

Concerns have been raised that the surcharge could increase transportation costs. Oyedele clarified that funds collected would be directed toward road maintenance and infrastructure, which would help reduce travel times, enhance safety, and lower vehicle repair and logistics expenses.

The surcharge will not affect all fuel types. Products used in households, including kerosene, LPG, and compressed natural gas (CNG), as well as clean and renewable energy sources, are exempt, supporting Nigeria’s green energy initiatives.

When asked why the surcharge cannot be removed, Oyedele explained that savings from fuel subsidies alone are insufficient to meet the country’s massive road infrastructure needs. A dedicated fund ensures reliable financing for road projects.

The government also highlighted that this measure aligns with broader efforts to ease the tax burden on citizens and small businesses, noting previous steps such as the removal of VAT on fuel, excise taxes on telecoms, and the cybersecurity levy.

Finally, Oyedele said transferring the surcharge from the FERMA Act to the new tax legislation strengthens the legal framework, providing a forward-looking system to support sustainable road funding and respond to future challenges.