- The Federal Government has explained when it plans to introduce fuel taxes in Nigeria.
- Finance Minister Taiwo Oyedele said the taxes would come when the economy stabilises and Nigerians’ incomes improve.
- The government plans to use the revenue from the taxes for road infrastructure and fuel reserves.
The Federal Government has revealed when fuel taxes will be introduced in Nigeria, saying the proposed taxes will only come when the economy stabilises and Nigerians’ income levels can accommodate the additional costs.
Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, said the government would prioritise economic growth and improved living conditions before introducing the taxes.
Taiwo Oyedele made this remarks during an interview with ARISE news, on the sidelines of the 2026 International Monetary Fund (IMF) and World Bank Annual Meetings in Bangkok, Thailand.
The minister explained that introducing additional taxes immediately after the removal of the petrol subsidy would put more pressure on Nigerians who are already dealing with rising living costs.
FG explains why fuel taxes will not come immediately
Oyedele said the government needed to complete its ongoing economic reforms, stabilise the economy and restore growth before considering the additional tax burden.
He argued that introducing fuel taxes immediately after the removal of the petrol subsidy would be insensitive to the financial difficulties facing households and businesses.
“You remove subsidy, you can’t immediately impose taxes. That would be insensitive. You push the people to the wall,” the minister said.
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The new position by the Federal Government means that Nigerians should not expect the proposed taxes to take effect on a specific date announced by the minister. Rather, their introduction would depend on improvements in economic conditions and people’s ability to bear the additional costs.
Oyedele also noted that fuel taxation was common in other countries, where governments collect different levies on petroleum products.
He said many countries around the world impose taxes on fuel, adding that several African countries have between six and 10 different taxes on petroleum products.
However, the minister maintained that Nigeria must first ensure that its economy is stable and household incomes have improved sufficiently before adopting similar measures.
How FG plans to use revenue from fuel taxes
The finance minister explained that the proposed fuel taxes in Nigeria would be intended to generate revenue for specific public projects rather than simply increase the financial burden on the citizens.
According to him, the revenue would be dedicated to road infrastructure and the development of fuel reserves that could help the country manage future disruptions in the petroleum market.
Oyedele said the reserves could help moderate fuel prices when unexpected events affect the supply or cost of petroleum products.
He explained that the government wanted a system in which revenue collected from fuel taxes would provide practical benefits to Nigerians through better infrastructure and improved energy security.
The minister also argued that the country’s economic policies should focus on improving people’s earnings rather than attempting to keep the prices of goods and services artificially low.
He said the important measure of economic progress should be how much people earn in relation to the prices they pay for goods and services.
Oyedele added that the government’s objective was to grow incomes faster than prices rise, expand prosperity and strengthen the middle class.
FG links fuel taxes to economic recovery
The proposed introduction of fuel taxes comes amid continuing public concern over the cost of petrol and the wider impact that have emerged from the removal of the fuel subsidy in 2023.
The policy change led to higher petrol costs and increased financial pressure on households and businesses, particularly those that depend on fuel for transportation, electricity generation and other daily activities.
The Federal Government has maintained that its economic reforms are intended to support growth, attract investment and improve long-term prosperity.
Oyedele said the government would consider the additional taxes when economic conditions improved enough for Nigerians to absorb the costs.
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