Nigeria postpones controversial fuel tax to 2026 to mitigate cost-of-living crisis

A traffic jam is seen at an express highway in Lagos, Nigeria, 6 August 2024. Reuters/ Francis Kokoroko/File Photo

Edun told reporters in Abuja the surcharge, targeting petrol, diesel, and other fossil fuels, required a formal government proclamation and an official order signed by the finance minister to be published in the National Gazette before implementation.

"The order will not be issued immediately. Government is aware of the economic situation of the times and would not deliberately increase the burden on Nigerians," he said.

Since coming into office in 2023, President Bola Tinubu has ended petrol and electricity subsidies and twice devalued the naira currency as part of reforms to boost Nigeria's decade-long sluggish output. However, those steps triggered the worst cost-of-living crisis in a generation and have yet to deliver faster growth.

The fuel surcharge is part of the new Nigeria Tax Act, which was signed into law in June and designed to harmonise tax rules and boost revenue as part of a broader fiscal overhaul.

While Edun emphasised that the surcharge was not a new tax, he noted its origins in a previous 2007 law, describing its inclusion in the new act as a move for "harmonisation and transparency".