5% fuel tax won’t start until naira gains, oil prices drop — Oyedele

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, says the proposed 5% fuel surcharge will only be introduced when the economy shows clear signs of recovery — particularly when the naira appreciates or global crude oil prices decline.

Oyedele made this known at the Haulage and Logistics Magazine Conference and Exhibition held in Lagos yesterday, explaining that although the levy is a well-intentioned policy to generate funds for road maintenance, implementing it now would impose additional hardship on Nigerians.

He recalled that the fuel surcharge was first introduced during the administration of former President Olusegun Obasanjo to channel part of fuel revenues into road rehabilitation — allocating 40% for federal roads and 60% for those managed by states and local governments.

“The idea is brilliant and already being implemented in more than 150 countries,” Oyedele said, noting that most of Nigeria’s 200,000 kilometres of roads remain in poor condition.

He disclosed that the Federal Roads Maintenance Agency (FERMA) had requested approval to commence collection of the levy following the removal of fuel subsidy, but the committee turned down the proposal.

“We said no – introducing such a tax now would be insensitive,” he stated.

Oyedele added that while the surcharge has been included in the draft tax law, it will only take effect upon an official order by the Minister of Finance.

“For me, the right time will be when the naira strengthens or crude prices drop, so the surcharge won’t raise pump prices,” he said.

He further assured that the ongoing tax reforms will bring relief to the haulage and logistics industry by cutting out multiple taxation, reducing operational costs, and boosting efficiency.

“We are not introducing new taxes; we are removing the many duplicated ones that frustrate transporters and increase prices,” he said.

According to Oyedele, small transport and logistics firms with an annual turnover below N100 million will be exempt from company income tax under the new policy, while qualifying operators will enjoy VAT refunds and other tax incentives.

He emphasized that the reforms aim to simplify Nigeria’s tax system, improve transparency in revenue collection, and ensure equitable distribution across all tiers of government.