The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has announced that the proposed 5 per cent fuel surcharge will not be implemented until Nigeria’s economy shows notable improvement, particularly in the value of the naira or a reduction in global crude oil prices.
Speaking at the Haulage and Logistics Magazine Conference and Exhibition in Lagos, Oyedele said the decision was guided by the need to avoid placing additional financial pressure on citizens already grappling with high living costs.
According to him, while the fuel surcharge policy remains a valid and forward-looking idea aimed at funding road maintenance, introducing it under the current economic conditions would be counterproductive.
“The intention behind the policy is good, but timing is everything,” Oyedele stated.
“We believe it would be insensitive to implement such a levy when Nigerians are still dealing with inflation and high transport costs.”
He explained that the surcharge, which dates back to the administration of former President Olusegun Obasanjo, was originally designed to dedicate part of fuel revenues to road repairs, with 40 per cent allocated to federal roads and 60 per cent to state and local government roads.
Oyedele noted that the system is already in use in more than 150 countries and remains a practical way to sustainably fund road infrastructure.
However, he emphasised that the Federal Roads Maintenance Agency (FERMA) had sought to introduce the levy immediately after removing fuel subsidies, but the committee rejected the proposal.
“We said no because implementing a fuel tax now would worsen the hardship millions of Nigerians face,” he said.
He further explained that although the surcharge was included in the draft tax law, it contains safeguards that require the Minister of Finance to issue a formal order before it can be enforced.
“In my view, the right time to activate the surcharge will be when the naira appreciates or when crude oil prices drop, so that pump prices won’t rise further,” Oyedele added.
The committee chairman also used the opportunity to assure operators in the haulage and logistics sector that the ongoing tax reforms will bring significant relief by removing redundant taxes and improving operational efficiency.
“We are not creating new taxes; we are simplifying the existing structure to eliminate the multiple levies that frustrate transporters and inflate costs,” he said.
Under the proposed framework, Oyedele revealed that small transport and logistics businesses with annual turnovers below ₦100 million will be exempted from company income tax.
Eligible operators, he said, will also benefit from VAT refunds and other targeted incentives aimed at stimulating growth in the sector.
He added that the broader goal of the reform is to create a transparent and efficient tax system that supports development and ensures fair revenue distribution among federal, state, and local governments.
According to him, “Nigeria’s tax system must work for the people, not against them. These reforms are meant to simplify compliance, reduce costs, and make taxation a tool for progress, not punishment.”