The planned implementation of 5 % surcharge on refined petroleum products, including petrol and diesel, starting January 1, 2026, is being opposed by stakeholders in the extractive sector and civil society organizations, CSOs.

This came as Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, said the law, if enforced could cause its members to close businesses.

Also, the African Democratic Congress, ADC and Labour Party, presidential candidate in the 2023 election, Mr. Peter Obi said the tax will worsen the hardship of already struggling Nigerians.

President Bola Tinubu had on June 26, 2023, signed the Nigeria Tax Administrative Act, which include the 5% surcharge on refined petroleum products, to take effect from January 2026.

The Federal Government said the Nigeria Tax Administration Act, aims to boost non-oil revenue and promote fiscal sustainability.

Stakeholders kick

Stakeholders in the extractive sector, who opposed plan to impose a 5% tax on petroleum products beginning from January 1, 2026, said that the move will further increase the pump price of petrol which most Nigerians depend on for transport and energy.

They noted that with the average national pump price of petrol at N950 per litre, about 382 per cent from N197 per litre when President Tinubu assumed office on May 29, 2023, Nigerians will be impoverished further.

In a note to Vanguard, Executive Director, Extractive360, Mrs. Juliet Alohan-Ukanwosu, said the policy will increase the cost of living for Nigerians.

She stated: “I think that at a time when Nigerians are already extremely burdened by the high cost of living, imposing additional tax burden on an essential good like petrol is a poorly thought-out idea.

“It portrays the government as completely insensitive to the plight of Nigerians. Knowing full well the implication of the increased cost of petrol and the multiplier effect on the economy, the common Nigerian will be further pushed into dire straits with this policy.

“Imagine this coming at a time when government is considering increased pay packages for political office-holders, whereas the common Nigerian gets nothing but more and more policies capable of driving them further into poverty,” she added.

On the impact of the policy on the players in the downstream sector, she said: “I don’t see it negatively impacting marketers, because market forces are already at play. Marketers will simply apply the policy and sell accordingly. The end users are the worst hit with this policy, in my opinion.”

On his part, Executive Director, Policy Alert, Tijan Bolton explained that the immediate impact of the surcharge will be an increase in the pump price of the products, adding the low and middle class would be worse hit.

Bolton stated: “Nigerians are still reeling from the initial removal of fuel subsidies as a flagship policy by the Tinubu administration, because this policy was imposed unthinkingly, without clear alternatives and measures to mitigate the impact on the poorest Nigerians.

“As we speak, many Nigerian households in this category are dedicating over half of their income to fuel and they will still be the ones to bear the brunt of the planned surcharges.

“In many of the communities where we work, majority of households have returned to firewood for household cooking, with dire implications for their health and the environment.

“With this policy, transport and energy running costs will escalate, and rather than boosting the non-oil sector, we will see that agricultural and manufacturing productivity will be directly impacted, which will further raise inflation”.

He explained further that “from a climate and energy transition perspective, I think this policy will have a counter-intuitive impact. The assumption that the surcharge will discourage fossil fuel consumption fails to factor in the relatively under-developed state of the renewable energy sector.

“Consumers can only pivot when alternatives are readily available and affordable. The government still has a lot to do in this area. Even the infrastructure and market for gas that has been touted as a transition fuel is evidently unready for the switch.”

Reacting, an umbrella body for pro-workers civil society organizations, the Joint Action Front, JAF, rejected the planned tax, vowing to mobilize Nigerians against it.

Speaking to Vanguard, JAF’s Secretary, Abiodun Aremu said: “JAF rejects this imposition and will do everything possible to organize, mobilize, and struggle with the people to resist and defeat such hardship. Why must there be a government, or a band of leaders, whose only agenda is to keep the poor, workers, and the majority of the people in perpetual suffering, servitude, agony, and untold hardship?

“Which crime did we commit against this government that every of its action or inaction is targeted at inflicting pains and hardship on the people? We call on Nigerians to prepare to battle, fight and resist this evil and wicked plan to impose five per cent petroleum consumption tax on suffering and impoverished Nigerians.”

On his part, Dr. Billy Gillis-Harry, National President of PETROAN, said: “We shall find it very difficult to obey. The times are hard. We do have the funds to buy fuel and pay 5 percent in the process. We have been discussing with some agencies of the government, including the National Assembly.

“We have told them that we shall find it difficult to pay. The law is too hard on the people and will need to be amended. The law, if enforced can cause our members to close businesses.”

Also speaking, Olatide Jeremiah, CEO, Petroleumprice.ng, said: “For me, this is an insensitive tax policy from the Federal Government. The downstream sector is already awash with several taxes from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.

“This proposed tax will add to the landings cost of petroleum products at the pump. Currently, the pump prices have indirectly affected the economy, and will further drive higher the prices of commodities in market. I am calling on the Federal Government to review this policy as Nigerians can’t afford to pay more at the pump.”

Concurring, the National President of Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “This government has already caused Nigerians much pains. This tax policy shows that the government is bent on inflicting more pains on the masses. Many Nigerians cannot feed anymore.

“This government needs to explain to us how this tax will improve the plights of Nigerians. We are not sure how they can achieve that. Other oil producing nations use oil to impact positively the masses. But in Nigeria, things are different. This is a bad tax policy and needs to be reviewed.”

Obi on his X handle, yesterday, said: “When will Nigerians truly breathe? A timely and relevant question, as a new five per cent tax on all refined fossil fuel sales, including petrol and diesel, has just been announced by the Federal Government.

“That is, Nigerians will pay a five per cent tax when buying their everyday fuel or diesel at a time when millions can hardly even afford the cost of transportation.

“Mr. President just on Wednesday boasted that Nigeria has met its revenue target for the year. Yet instead of easing hardship, the government imposes more burden on Nigerians.

“Even the so-called alternative, CNG, has become unaffordable, rising from about N230 to N450, while the promised subsidies on the CNG have quietly vanished.

“If our revenues are truly ‘excessive’ as claimed, should they not first be used to fund education, healthcare and pulling Nigerians out of poverty? Why tax citizens who cannot even breathe anymore?

“This five per cent fuel tax should wait until Nigerians begin to see tangible improvements in their lives from all the many promises from Mr. President.

“Leadership is not about giving a burden, it is about reducing suffering, it is about care and compassion. A new Nigeria is possible,” he added.

The opposition ADC, in its reaction described the tax as a cruel policy that will worsen the hardship of already struggling Nigerians.

In a statement signed by Mallam Bolaji Abdullahi, ADC’s National Publicity Secretary, the party accused the Federal Government of misleading the public with false revenue claims while continuing to borrow and implement harsh economic measures.

The statement said: “The ADC finds this tax cruel and deeply insensitive at a time when the majority of Nigerians are still reeling from the effects of fuel subsidy removal. Regardless of the economic motives behind this tax, what is clear is that this government simply does not care about the people.”

The party challenged the administration’s claims of record-breaking revenue growth, insisting that the figures do not add up.

“Nigerians will recall that when the 2025 budget was passed, it projected a total revenue of N41.81 trillion. Yet today, the Federal Government is celebrating the mobilization of N20.59 trillion, leaving a gaping shortfall of N21.22 trillion.”

It explained that not all revenues accrue directly to the Federal Government, which only receives 52.68 per cent of statutory revenue and 15 per cent of VAT, adding that when measured on a pro-rata basis, the claimed achievements were ‘hollow and unrealistic.’

“The shortfall becomes even more glaring. This exposes the hollowness of the claims by government and also reveals these so-called revenue achievements for what they truly are, another act in the APC and President Tinubu’s propaganda performance,” it said.

The party also rejected Tinubu’s recent remarks on the exchange rate.

“President Tinubu claimed that when he took office on May 29, 2023, the dollar-to-naira rate was N1,900 to a dollar, and that it is now N1,450. A simple Google search will show that on the morning he was sworn in, the naira traded at approximately N460.72 to the US dollar, and between N700 and N800 in the parallel market,” the party stated.

It noted that under Tinubu’s leadership, the naira had lost more than 50 per cent of its value, eroding savings and driving up food, rent and transport costs.

The ADC further dismissed the President’s claim that his government had stopped local borrowing, citing the Debt Management Office’s disclosure that N136.16 billion was raised through a bond auction on August 26, 2025.

It also pointed to the National Assembly’s approval of a $21 billion loan in July, which pushed the national debt to a record $120 billion or N180 trillion.

“If revenues are truly being met, why is this government still borrowing? The answer is simple, the revenue narrative is built on falsehood,” Abdullahi said.

Beyond the petrol tax, the party criticized the 300 per cent hike in the cost of obtaining an international passport, describing it as one of the most expensive globally relative to wages.

“As if this were not enough, the government has also increased the cost of obtaining a Nigerian international passport by 300 per cent, making it one of the most expensive in the world. In Nigeria, it now costs 143% of the minimum wage,” it said.

The ADC further claimed that the Federal Government is exploiting Nigerians by celebrating supposed progress while enacting policies that deepen poverty.

Dr. Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise, CPPE, said implementing of the five per cent fuel tax without safeguards may exacerbate inflationary pressures.

He said: “The introduction of a fuel levy in a pre-election period is politically risky and may fuel public discontent. Citizens are still adjusting to subsidy removal, high inflation, and exchange rate shocks.

“Any additional burden on fuel prices could trigger erosion of trust in government reforms.

Fuel price increases have a direct pass-through effect on transport costs, food prices, and overall inflation. Implementing the levy without safeguards may exacerbate inflationary pressures, weakening purchasing power and slowing recovery efforts.

“Social implication includes heightened social cost, while economic risk includes an inflationary spiral triggered by higher transport and food prices.

“The 5% PMS levy is legally grounded but must be implemented strategically. A rigid January 2026 commencement risks inflation, political backlash, and social discontent,” he added.

Don’t make Nigerians pay for energy transition, Arewa Youths tell FG

Also, the Arewa Youths Assembly has urged the Federal Government not to transfer the financial burden of Nigeria’s shift from fossil fuels to renewable energy onto ordinary citizens.

Speaking with Vanguard, the group’s leader, Salihu Danlami, said: “We recognize the government’s vision in promoting clean and renewable energy, which is naturally replenished, causes little or no environmental pollution, produces minimal greenhouse gas emissions, and does not run out over time. (Vanguard)

• President Bola Tinubu had on June 26, 2023, signed the Nigeria Tax Administrative Act, which include the 5% surcharge on refined petroleum products