Starting January 2026, Nigerians will pay a new petrol consumption tax introduced under President Bola Tinubu’s administration. The policy imposes a 5% levy on petrol purchases, meaning consumers will be charged N500 for every N10,000 spent on fuel.
Meanwhile, the Presidential candidate of Labour Party (LP) in the 2023 elections, Peter Obi, says the federal government should delay the implementation of the 5% fuel tax “until Nigerians begin to see tangible improvements in their lives from all the many promises from Mr. President.”
Obi noted that this is imperative because “leadership is not about giving a burden, it is about reducing suffering, it is about care and compassion.”
But the federal government has explained that the levy is aimed at discouraging fossil fuel dependence while promoting cleaner and renewable energy adoption. The tax, which will be collected at the point of sale, will not apply to kerosene, cooking gas, Compressed Natural Gas (CNG), or other clean energy sources.
Officials say revenue generated will be invested in climate change mitigation projects and renewable energy initiatives.
But critics warn the policy could worsen inflation and transportation costs, pushing up the price of goods and services. Analysts also argue the levy will hit low-income households hardest, as many already struggle with rising fuel prices and living costs.
While the government insists the measure is part of its green energy transition strategy, many Nigerians fear the policy’s immediate economic burden will outweigh its long-term benefits.
Obi, a major Presidential candidate in the 2027 elections, said in a statement via his X handle on Wednesday August 3, 2025 said: “A timely and relevant question, as a new 5% tax on all refined fossil fuel sales, including petrol and diesel, has just been announced by the Federal Government.
“That is, Nigerians will pay a 5% tax when buying their everyday fuel or diesel at a time when millions can hardly even afford the cost of transportation.
“Mr. President just yesterday boasted that Nigeria has met its revenue target for the year. Yet instead of easing hardship, the government imposes more burden on Nigerians.
“Even the so-called alternative, CNG, has become unaffordable, rising from about ₦230 to ₦450, while the promised subsidies on the CNG have quietly vanished.
“If our revenues are truly ‘excessive’ as claimed, should they not first be used to fund education, healthcare and pulling Nigerians out of poverty? Why tax citizens who cannot even breathe anymore?
“This 5% fuel tax should wait until Nigerians begin to see tangible improvements in their lives from all the many promises from Mr. President. Leadership is not about giving a burden, it is about reducing suffering, it is about care and compassion.”