The Federal Government’s proposed 5% fossil fuel tax, scheduled for January 2026, is anchored in a commendable ambition: to reduce emissions, shift Nigeria toward cleaner energy, and align with global climate goals. In principle, it’s a forward-thinking policy. In practice, however, it risks compounding the hardship of millions already stretched thin by recent economic reforms.
President Bola Tinubu has shown courage in confronting Nigeria’s structural challenges—from subsidy removal to forex liberalization. These were bold, necessary steps. And to his credit, the President has demonstrated a willingness to listen and reverse course when policies threaten to overwhelm the people. We recall his suspension of the cybersecurity levy and his intervention to review fee hikes in federal institutions. These were moments of empathy and leadership.
This is another such moment.
While the fossil fuel tax may be well-intentioned, it is avoidable at this time. Here are five unassailable reasons why:
1. The People Are Still Reeling
The economic shock from subsidy removal and forex reforms is still unfolding. Prices of food, transport, and basic services are still high. Introducing a new tax on fuel—used daily by households and SMEs—is akin to pouring salt into an open wound. The people are choking. This is not the time to add more weight.
2. Flat Taxes Deepen Inequality
A uniform 5% surcharge disregards Nigeria’s vast income disparities. Millions rely on petrol generators to power their homes and businesses. A progressive model—based on income or consumption levels—would have been more equitable. As ActionAid Nigeria noted, the policy will “disproportionately impact the poor” and deepen inequality.
3. Inflation Will Spike
This tax will ripple through the economy. Transport costs will rise. Goods and services will follow. There is fear that motorists will hike fares, which will have ripple effects in the wider economy. At a time when inflation has already eroded purchasing power, this move could tip many into deeper poverty.
4. Reform Fatigue Is Real
Reform is a marathon, not a sprint. Nigerians have shown resilience, but there’s a limit to how much pain can be absorbed at once. The government must continue to prioritize easing the burden—accelerating palliatives, improving public transport, and expanding access to clean energy as they are doing with the CNG policy—before introducing new levies.
5. Compassion Is Leadership
This is a moment for the President to once again show that he governs with empathy. By reversing this tax, he will affirm that economic transformation must not come at the cost of human dignity. Nigerians need relief, not more pressure. They want the President to walk with them, not ahead of them.
Let us be crystal clear: we support the President’s bold vision for Nigeria. We applaud the strides in increasing solar capacity, the push for cleaner energy, and the courage to confront entrenched inefficiencies. But progress must be paced. Reform must be humane.
This tax, though noble in intent, is unnecessary at this point. It should be reversed.
Let the President rise again—as he has done before—and remind Nigerians that leadership is not just about policy, but about people.
FUEL TAX: NOBLE INTENT, AVOIDABLE BURDEN BY OLABODE OPESEITAN
