Nigeria’s federal government will introduce a 5 per cent tax on petrol consumption starting in January 2026. Under the new regulation, for every ₦10,000 spent on petrol, consumers will owe an additional ₦500 in tax.
The levy, to be applied at the point of sale, forms part of a broader Harmonized Tax Act recently signed into law by President Bola Tinubu.
Officials say the purpose of the new tax is to discourage the use of fossil fuels and to encourage adoption of cleaner energy alternatives. Certain energy sources such as kerosene, liquefied petroleum gas (LPG), and compressed natural gas (CNG)—will be exempted.
Government projections indicate that revenue generated from the 5 per cent levy will be directed toward funding climate-change and sustainability initiatives.
Analysts, however, warn that the policy may exacerbate inflation, particularly by raising transportation costs nationwide. Critics also point out that the flat‐rate structure of the tax may place a disproportionate burden on lower- and middle-income households.
At fuel stations, consumers can expect to see the added charge reflected when they purchase petrol, although exact implementation details such as whether the percentage will apply per litre or per transaction value have not been fully published.
Some social-media posts reiterate that from January 2026, Nigerians will pay this additional 5 per cent tax on each litre purchased.
