The Nigerian government will introduce a new tax on petroleum consumption starting January 2026. Under the new law, Nigerians will pay 5% tax, which amounts to 500naira on every 10,000 naira spent on petrol. The levy is designed to discourage fossil fuel use and push citizens to cleaner energy.
Key points:
A new 5% tax, amounting to 500naira on every 10,000naira spent on petrol, will begin in January 2026.
The new tax aims to discourage fossil fuel use and boost cleaner energy.
It will be collected in 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 Nigerian’s dependency on fossil fuel. However analysts are concerned that the policy will place a disproportionate economic burden on everyday citizens already struggling with high costs.
