By Agbonavbare Victor Omoregbe

The recent revelation by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele that the Federal Government plans to introduce a fuel tax in Nigeria has stirred controversy.

Nigerians are describing it as callous and insensitive to their suffering.

Although the minister clarified that the tax would only be imposed when the Federal Government was satisfied that the economy had stabilised and Nigerians’ incomes had improved sufficiently to accommodate the additional cost, Nigerians have rejected his explanation, with many describing it as another ploy to deceive them and inflict more pain on them.

Oyedele had, during an interview on the sidelines of the 2026 International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, disclosed that the Federal Government would introduce a fuel tax when the economy stabilised and Nigerians’ incomes improved sufficiently to accommodate the additional cost.

He said revenue from the levy would support road infrastructure and the development of a fuel reserve to cushion the effects of future price shocks, stressing that its implementation would require a ministerial order published in the Official Gazette.

His comments came against the backdrop of previous resistance by organised labour and business groups to the five per cent surcharge on chargeable fossil fuel products provided for in Nigeria’s tax framework. Its commencement remains subject to an order by the finance minister.

He said introducing the tax while petrol was subsidised would have been counterproductive because the government would effectively have paid the charge itself. Imposing it immediately after the removal of the subsidy, he added, would have placed additional pressure on Nigerians.

This latest development has reopened old wounds over the removal of the fuel subsidy, as Nigerians, particularly those who run their businesses on generators, have expressed anger and frustration with the All Progressives Congress, APC-led government and its policies.

Explaining the proposed use of the revenue, Oyedele said the fuel reserve would help moderate prices of fuel products if anything happens.

He added that the government could temporarily waive the tax during future price shocks to ease pressure on consumers.

The existing surcharge framework exempts household kerosene, cooking gas, compressed natural gas and clean or renewable energy products.

As recently as June 16, 2026, the government dismissed reports that it was introducing fresh taxes on petroleum products following recommendations in the IMF’s Article IV consultation report. It said the VAT waiver on petroleum products remained in place and that no process to activate the fuel surcharge was then under consideration.

Comparing Nigeria’s position with that of other countries, Oyedele said taxes accounted for between 20 and 80 per cent of pump prices in some jurisdictions, while several African countries imposed between six and 10 different charges on petroleum products.

He also explained the sequencing of the petrol subsidy removal and foreign exchange reforms, saying the government initially removed support for petrol prices before allowing the naira to adjust gradually.

According to him, exchange-rate movements significantly influenced petrol prices, requiring the government to manage the transition while considering its impact on Nigerians.

Oyedele said the petrol subsidy was completely removed in October 2023, when government support for both petrol prices and foreign exchange was no longer in place.

With the proposed fuel tax looming, Nigerians are saying that the government should be considering measures to cushion the harsh effects of the subsidy removal rather than inflicting more hardship on the people.

A tailor, Niyi Osundare, argued that another levy would deepen the hardship faced by citizens already struggling with the removal of the subsidy, rising living costs and naira depreciation.

On the promise that the proceeds would fund road infrastructure and cushion the effects of price shocks, a lawyer and public affairs analyst, Kunle Onatade, dismissed it as a false promise.

He said the government had promised Nigerians that it would use the proceeds from the removal of the fuel subsidy for infrastructure development, but that had not happened.

Instead, he argued, the government had borrowed more in three years than the administration of late former President Muhammadu Buhari had borrowed in eight years.

Business groups have also expressed concern about the implications for production, transportation and consumer prices.

The Association of Small Business Owners of Nigeria urged the government to prioritise relief for businesses and households, warning that an additional fuel charge would worsen their financial burden.