Nigeria’s Tax Committee Exempts Kerosene, LPG, and CNG from 5% Fuel Surcharge to Ease Cost-of-Living Pressure
The Presidential Fiscal Policy and Tax Reforms Committee has announced that Nigeria’s new 5% fuel surcharge will not apply to essential household energy products such as kerosene, cooking gas (LPG), compressed natural gas (CNG), and clean or renewable energy solutions. The clarification came after rising concerns that the levy could deepen the financial strain on citizens already grappling with higher fuel and living costs.
Committee chairman Taiwo Oyedele explained in a statement released on Saturday that the exemptions are designed to protect households from additional economic hardship while supporting the country’s energy transition agenda. Nigerians have seen kerosene prices nearly double in the past year, raising fears that new taxes would make daily survival even harder for low- and middle-income families.
The 5% fuel surcharge, part of Nigeria’s sweeping new tax reforms, will not take effect immediately. According to the committee, it can only be enforced once the Minister of Finance issues a formal order through the Official Gazette. This safeguard, the committee noted, ensures the government carefully considers timing and economic realities before rolling out the policy in January 2026.
Oyedele further explained that the surcharge is aimed at creating a dedicated fund for road infrastructure, a common practice in more than 150 countries where similar levies range from 20% to 80% of fuel costs. If implemented effectively, the surcharge could improve road safety, reduce travel time, cut vehicle maintenance expenses, and ultimately lower logistics costs across Nigeria’s economy.
The exemption is part of broader tax reforms signed into law by President Bola Tinubu in June 2025. These reforms include the Nigeria Tax Act, the Nigeria Tax Administration Act, and other bills that reshape the country’s fiscal framework. While the bills have sparked widespread debate, the government insists the reforms strike a balance between raising funds for infrastructure and easing the tax burden by scrapping or suspending multiple levies, including VAT on fuel and excise duties on telecoms.
Source: Nairametrics