The Nigerian government is set to introduce a petrol consumption tax starting January 2026, imposing a 5% levy equivalent to N500 for every N10,000 spent on petrol. This policy aims to discourage fossil fuel reliance and promote cleaner energy use across the country.
The tax will be collected directly at the point of sale but will exclude kerosene, cooking gas, Compressed Natural Gas (CNG), and other renewable energy sources. According to government officials, the revenue generated will be invested in climate change projects and renewable energy initiatives to support Nigeria’s sustainable development goals.
“The introduction of this levy marks a significant step toward reducing our dependence on fossil fuels while funding vital environmental programmes,” a government spokesperson said.
Despite these intentions, analysts warn the tax could exacerbate inflation, as transport costs are expected to rise sharply. Critics have also raised concerns that the flat rate will disproportionately impact lower-income households already struggling with rising fuel prices.
Many Nigerians, while acknowledging the environmental aims, worry about the immediate economic strain this new tax will place on everyday living, particularly on transportation and essential goods.
