Nigeria FG to Tax Petrol Consumption by 5% in 2026

The Digest:

The Nigerian government will introduce a new tax on petrol consumption starting in January 2026. Under the new law, Nigerians will pay a 5% tax, which amounts to N500 on every N10,000 they spend on petrol. The levy is designed to discourage fossil fuel use and push citizens toward cleaner energy.

Key Points:

• A new 5% tax, amounting to N500 on every N10,000 spent on petrol, will begin in January 2026.
• The new tax aims to discourage fossil fuel use and boost cleaner energy adoption.
• It will be collected at the point of purchase.
• The tax exempts clean energy sources, kerosene, cooking gas, and Compressed Natural Gas (CNG).
• Analysts fear the new levy will worsen inflation as transport costs rise.
• The government expects the revenue to fund climate change projects.
• Critics argue the flat rate disproportionately affects the poor.

The new tax is a significant step towards addressing climate change and reducing Nigeria's dependence on fossil fuels. However, analysts are concerned that the policy will place a disproportionate economic burden on everyday citizens already struggling with high costs.

Sources: Vanguard Newspaper