The Federal Government has said that the proposed five percent fuel tax will not take effect until there is a clear appreciation of the naira or a drop in global crude oil prices.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, disclosed this while speaking at the Haulage & Logistics Magazine Conference and Exhibition in Lagos. He noted that implementing the levy now could worsen inflationary pressures and increase transportation costs for Nigerians.
According to Oyedele, the levy — which falls under the Federal Roads Maintenance Agency (FERMA) framework — will fund the maintenance of federal, state, and local roads. About 40 percent of proceeds would go to federal roads and 60 percent to state and local governments.
“For me, the right time to begin the fuel tax is when the naira strengthens or crude oil prices drop. That way, the surcharge won’t raise pump prices,” he said.
He added that a modest appreciation of about five percent in the naira could make the fuel tax feasible without affecting retail pump prices. The Ministry of Finance would issue the official implementation order only after the stated economic conditions are met.
Oyedele also noted that the ongoing tax reforms are aimed at simplifying Nigeria’s tax structure and eliminating multiple and overlapping levies that discourage business growth.
Industry analysts have welcomed the delay, describing it as a pragmatic approach that balances fiscal needs with public welfare. They, however, urged the government to provide a clear timeline and communication strategy to avoid uncertainty in the downstream sector.
Written By: Subair Damilare Adebayo
