FG Says Fuel Tax Will Wait Until Economy and Incomes Improve

Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, says the Federal Government plans to introduce a fuel tax only after the economy stabilises and Nigerians’ incomes can better absorb it. He said imposing the levy while petrol was subsidised, or immediately after subsidy removal, would have added pressure on households. He argued that the priority should be growing incomes faster than prices instead of trying to hold down prices indefinitely. According to Oyedele, revenue from a future fuel tax would be used for road infrastructure and a fuel reserve that could cushion supply or price shocks. He said the levy cannot take effect without a formal gazette order by the finance minister. He also said the government fully removed petrol subsidy in October 2023, after previously managing the effects of rising exchange rates on pump prices.

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