The Federal Government could earn N796bn annually from a planned 5% surcharge on petrol and other fossil fuels starting January 2026, according to The PUNCH analysis.
The Federal Government is set to introduce a five per cent surcharge on locally produced and imported petrol under a new tax policy that takes effect from January 1, 2026. Analysis by The PUNCH shows the surcharge could generate about N796bn annually from petrol alone.
The levy, contained in the Nigeria Tax Administration Act, is part of four tax reform bills signed into law by President Bola Tinubu on June 26, 2025. It targets fossil fuel products such as petrol, diesel, and aviation fuel, but exempts household kerosene, cooking gas, and renewable energy products.
Consumers and marketers have raised concerns, warning the surcharge could push up pump prices and worsen economic hardship. IPMAN stated the new charge “would indirectly lead to an increase in the pump price.”
Government officials argue the measure is necessary to boost non-oil revenue and promote fiscal stability amid rising debt and subsidy removal.