FG Reveals How It Will Use 5% Fuel Tax

The Federal Government has clarified that the 5% fuel tax, which has been a subject of controversy, is intended to finance road maintenance. Of these funds, 40% will be directed to federal roads, and the remaining 60% will be disbursed to state governments.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, explained this while featuring on Channels Television’s The Morning Brief on Tuesday.

During the interview, Oyedele said the surcharge was created under a 2007 law but was never implemented because fuel subsidies were still in place at the time.

“One very important message for people to know is that this surcharge was not introduced by this government. It was introduced in 2007,” Oyedele clarified.

He stressed that the levy was not part of the tax bills signed by President Bola Tinubu earlier this year and was also not proposed by the Presidency to the National Assembly.

“While we were doing this tax reform, it was not even in the original proposal. But in the process of working on the bills, these issues came up, and then the decision was made that we should not have different agencies collecting taxes,” he explained.

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In recent days, Nigerians have expressed anger over reports that the 5% surcharge would take effect in January 2026.

Critics argued that the timing of the policy was insensitive, given the soaring cost of fuel and inflation already biting households and businesses.

However, Oyedele dismissed the speculations, saying there is no fixed date for the implementation of the surcharge.

“There is no indication that the implementation of the surcharge will begin in January, contrary to speculations,” he said.

Civil society groups and labour unions have strongly opposed the policy.

The Trade Union Congress (TUC) described it as “economic wickedness” and threatened to mobilise workers for a nationwide strike if the plan went ahead. The Organised Private Sector has also rejected the levy, warning it would cripple struggling businesses.

Despite the backlash, Oyedele argued that the surcharge could provide a sustainable solution to Nigeria’s failing road network.

“This is about ensuring our roads are properly maintained. Nigerians will benefit from this in the long run,” he insisted.