Fuel surcharge deferred until naira strengthens, oil prices ease
Story by Martha Gwary
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has announced that the proposed 5 per cent fuel surcharge will not take effect until Nigeria’s key economic indicators improve — notably, a stronger naira or a decline in global crude oil prices.
Speaking at the Haulage and Logistics Magazine Conference and Exhibition in Lagos yesterday, Mr Oyedele explained that although the surcharge is a well-intentioned policy aimed at generating funds for road maintenance, implementing it under the current economic conditions would only deepen the financial pressure on Nigerians.
He noted that the surcharge, first introduced under the administration of former President Olusegun Obasanjo, was designed to allocate a portion of fuel revenue to road rehabilitation — with 40 per cent earmarked for federal roads and 60 per cent for state and local government roads.
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“The idea is brilliant and already operational in over 150 countries,” he said, pointing out that most of Nigeria’s 200,000 kilometres of road network remain in deplorable condition.
Mr Oyedele revealed that the Federal Roads Maintenance Agency (FERMA) had sought approval to begin collecting the levy following the removal of fuel subsidies, but the committee rejected the request.
“We said no — introducing such a tax now would be insensitive,” he stated.
According to him, while the surcharge has been incorporated into the draft tax law, its implementation will be subject to an official order from the Minister of Finance, ensuring that it only commences under favourable economic conditions.
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“For me, the right time will be when the naira appreciates or global crude prices decline, so the surcharge does not push up pump prices,” he added.
Mr Oyedele further assured that the ongoing fiscal and tax reforms would provide substantial relief to the haulage and logistics industry by eliminating multiple taxation, cutting operational costs, and enhancing efficiency.
“We are not introducing new taxes; we are removing redundant ones that burden transport operators and inflate prices,” he stressed.
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He also disclosed that, under the reformed policy framework, small transport and logistics firms with an annual turnover below ₦100 million will be exempt from company income tax. Eligible businesses will also enjoy VAT refunds and other tax incentives.
Mr Oyedele concluded that the reforms aim to simplify Nigeria’s complicated tax regime, ensure transparency in revenue collection, and guarantee equitable distribution of funds across all tiers of government.
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