Relief as FG exempts kerosene, cooking gas, CNG from 5% fuel surcharge

The Presidential Fiscal Policy and Tax Reforms Committee has assured Nigerians that the proposed five per cent fuel surcharge under the new tax framework will not affect essential household energy products such as kerosene, cooking gas (LPG), compressed natural gas (CNG), and other clean or renewable energy sources.

The clarification, contained in a Frequently Asked Questions (FAQs) document released on Saturday via X (formerly Twitter), was issued by the committee’s chairman, Taiwo Oyedele, following growing public anxiety that the surcharge could worsen the cost-of-living crisis. “No. Several energy products used by households are exempt. This includes household kerosene, cooking gas (LPG), and compressed natural gas (CNG). Clean and renewable energy products are also excluded to align with Nigeria’s energy transition agenda,” the committee stated.

Oyedele explained that the surcharge will not kick in automatically when the new tax laws come into effect in January 2026. Instead, its implementation will only begin once the Minister of Finance issues a formal order published in the Official Gazette.

“It will only commence when the Minister of Finance issues an order published in the Official Gazette as stated under Chapter 7 of the Nigeria Tax Act, 2025. This safeguard ensures careful consideration of timing and economic conditions before implementation,” the committee added.

According to the committee, proceeds from the surcharge are expected to provide a dedicated pool of funds for road infrastructure and maintenance. However, officials cautioned that while savings from petrol subsidy removal have been channeled to some road projects, they remain insufficient to meet Nigeria’s vast and recurring infrastructure needs. The committee also rejected claims that the new levy contradicts the administration’s pledge to cut taxes. It pointed out that the government has already scrapped or suspended several charges, including value-added tax (VAT) on fuel, excise tax on telecoms, and the controversial cybersecurity levy.

On why the surcharge cannot be abolished outright, the fiscal committee stressed that it is designed to guarantee long-term road financing.

“If implemented effectively, it will provide safer travel conditions, reduce travel time and cost, lower logistics costs and vehicle maintenance expenses, which will benefit the wider economy,” the statement read.

The committee further noted that Nigeria is not alone in this approach. “This practice is virtually universal with over 150 countries imposing various charges ranging between 20% to 80% of fuel products to guarantee regular investment in road infrastructure,” it explained.

President Bola Tinubu had in June signed four major tax reform bills into law, including the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.

The reforms, which take effect from January 1, 2026, generated heated debate among stakeholders. The Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, whose agency will now operate as the National Revenue Service (NRS), said the bills were shaped after months of consultations to reflect diverse public concerns.