Beginning January 2026, Nigerians will be required to pay a 5% tax on petrol consumption under a newly enacted tax law. The levy, part of the Harmonized Tax Act signed by President Bola Tinubu, is aimed at boosting government revenue and encouraging a shift toward cleaner energy sources.
The tax will be applied at the point of purchase for all fossil fuel products, including petrol and diesel. However, exemptions have been made for household kerosene, cooking gas, compressed natural gas (CNG), and other renewable energy sources.
Government officials describe the move as a strategic step to diversify Nigeria’s revenue streams and reduce dependence on oil exports. The funds generated are expected to support infrastructure development, climate change initiatives, and social welfare programs.
Despite its intended benefits, the announcement has sparked concern among citizens, civil society groups, and economic analysts. Many fear the tax will exacerbate inflation, increase transport costs, and deepen financial hardship for households already struggling with high fuel prices.
Labour unions have hinted at possible protests unless adequate palliatives are introduced to cushion the impact. Critics argue that a flat-rate tax disproportionately affects low-income earners and small businesses that rely heavily on petrol-powered generators.
