Fuel Tax Won’t Begin Until Naira Strengthens, Oil Prices Drop — Oyedele

From Marcus Nkire

Presidential Tax Reform Chairman says implementing fuel surcharge now would burden Nigerians

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has clarified that the proposed 5% fuel surcharge will not take effect until Nigeria’s economic indicators improve — specifically a stronger naira or a decline in global crude oil prices.

Speaking at the Haulage and Logistics Magazine Conference & Exhibition held in Lagos on Thursday, Oyedele explained that while the fuel surcharge is a sound policy intended to fund road maintenance, introducing it under current economic conditions would further strain Nigerians already grappling with high living costs.

“The idea behind the surcharge is brilliant and has worked in over 150 countries,” Oyedele said. “But implementing it now would be insensitive, given the current hardship.”

He noted that the Federal Roads Maintenance Agency (FERMA) had earlier proposed to start collecting the levy following the removal of fuel subsidy, but the committee turned down the request.

“We said no — introducing such a tax now would worsen the burden on citizens. The right time will be when the naira appreciates or crude oil prices drop so that the surcharge won’t raise pump prices,” Oyedele stated.

According to him, the fuel surcharge policy—first introduced during President Olusegun Obasanjo’s administration—was designed to allocate part of fuel revenue to road repairs: 40% for federal roads and 60% for state and local government roads.

Oyedele revealed that the surcharge has been included in the draft tax law but will only take effect upon the approval of the Minister of Finance, ensuring it does not adversely impact citizens.

He further emphasized that the ongoing tax reforms aim to simplify Nigeria’s complex tax system and reduce the cost of doing business, especially in the haulage and logistics sector.

“We are not introducing new taxes,” he clarified. “Instead, we are eliminating multiple and duplicated taxes that frustrate transporters and inflate prices.”

Under the new policy, small transport and logistics businesses with an annual turnover below ₦100 million will be exempt from Company Income Tax (CIT), while qualified operators will enjoy VAT refunds and other tax incentives.