5% Fuel Surcharge: A Look Back at the 2007 Law, Not a New Tinubu Policy

The recent uproar over a proposed 5% fuel surcharge has caused confusion for many Nigerians who believed it to be a new tax from President Bola Tinubu’s government. However, as clarified by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, this surcharge is not a new policy at all. It’s a law that has been on the books since 2007.

Why the Surcharge Was Never Implemented

For over a decade, this law remained dormant because the government was subsidizing fuel. The subsidies made implementing the surcharge unnecessary at the time. Oyedele explained that the original law mandated the Federal Road Maintenance Agency (FERMA) to collect the fee. The revenue was intended to be split to fund crucial road maintenance: 40% for federal roads and 60% for state roads.

Addressing Current Speculation

Despite recent reports, Oyedele has confirmed that this surcharge was not part of the current administration’s initial tax reform bills. He also stated that there is no official plan to begin implementing the surcharge in January, contrary to widespread rumors. The discussion around the surcharge arose during a review of existing tax laws, with the goal of streamlining tax collection and preventing multiple agencies from collecting separate fees.

Public and Stakeholder Reactions

The mere mention of the surcharge has drawn significant criticism from various groups, including civil society organizations and trade unions. The Trade Union Congress (TUC) even threatened a strike, and the Organized Private Sector has voiced its opposition. However, Oyedele believes that if the surcharge were implemented, it would ultimately benefit Nigerians by creating a sustainable source of funding for road infrastructure maintenance.