The Nigerian government will rake in an estimated N796 billion in revenue annually from a five percent surcharge on locally produced and imported premium motor spirit (petrol).
This will be the case upon the implementation of the country’s new tax laws, expected to take effect from January 1, 2026.
Recall that President Bola Ahmed Tinubu signed four new tax bills into law on June 26, 2025. The 5 percent surcharge on fossil fuel is contained in one of four new tax acts, under the Nigeria Tax Administration Act.
In a document of the new tax policy, the 5 percent surcharge targets fossil fuel products provided or produced in Nigeria, including diesel, kerosene, aviation fuel, and compressed natural gas, among others. However, the tax excludes renewable energy products and household kerosene, cooking gas, and compressed natural gas.
“A surcharge is imposed at five percent on chargeable fossil fuel products provided or produced in Nigeria and shall be collected at the time a chargeable transaction occurs,” the law reads in part.
