FG speaks on ‘introducing petrol tax’

The Minister of Finance, Taiwo Oyedele, has dismissed reports that the Federal Government plans to introduce a five per cent tax on retail petroleum products, saying a fuel tax is not being considered by the administration.

Oyedele made the clarification in a statement posted on his X account on Tuesday, amid concerns that the proposed levy could further increase the financial burden on Nigerians already struggling with the high cost of living.

The minister’s response followed reports suggesting that President Bola Tinubu’s administration was planning to impose a five per cent tax on petrol and other retail petroleum products.

Some of the reports attributed the proposed tax to Oyedele, prompting the minister to clarify his position and explain what he had said during an interview with ARISE News.

“In my interview with ARISE News, I was clear: a fuel tax is not on the table,” he said.

His statement indicates that the Federal Government has no immediate plan to introduce the proposed levy, contrary to reports that had generated concerns among motorists, transport operators and other consumers.

Concerns over petrol prices

The clarification comes amid sustained pressure on households and businesses over the cost of petrol, which has become a major component of transportation and operating expenses across the country.

According to reports, petrol is selling for between N1,370 and N1,429 per litre at some filling stations, further highlighting the financial challenges facing consumers.

The high cost of the product has affected commercial transport operators, traders, manufacturers and other businesses that depend on petrol-powered vehicles and equipment.

For many households, increases in fuel prices translate into higher transportation fares and the cost of goods and services, as businesses pass on some of their operating expenses to consumers.

The possibility of an additional five per cent tax on retail petroleum products therefore raised concerns that motorists and other consumers could face further increases in their daily expenses.

Proposed levy raises concerns

A five per cent tax on retail petroleum products, if introduced and applied to the retail price, would increase the amount consumers pay at the pump.

The actual additional cost would depend on the tax’s legal structure, the products covered and the basis on which the levy was calculated.

However, the prospect of introducing such a charge amid already elevated petrol prices had raised questions about its potential impact on inflation, transportation costs and the purchasing power of Nigerians.

Businesses that rely heavily on petrol could also face higher operating expenses, potentially affecting the prices of goods and services.

Oyedele’s clarification has consequently provided an important distinction between reports of a proposed fuel tax and the government’s stated position, as communicated by the finance minister.

Government faces economic pressure

The Federal Government continues to face pressure to address the economic consequences of rising living costs, with fuel prices remaining a major concern for households and businesses.

The removal of the petrol subsidy and subsequent changes in the downstream petroleum market have made the cost of fuel a key factor in Nigeria’s wider economic challenges.

Higher transportation expenses have affected the movement of people and goods, while businesses have had to contend with increased logistics and production costs.

Against this background, the introduction of another levy on petroleum products could have attracted further public concern over the possibility of additional price increases.

Oyedele’s statement, however, focused on rejecting the claim that a fuel tax was being considered, rather than announcing any new fiscal policy.

No fuel tax on the table, minister insists

By stating that a fuel tax was not on the table, Oyedele sought to correct the impression created by reports linking him to the proposed five per cent levy.

He did not announce a new tax measure or provide details of any plan to impose an additional charge on petrol purchases.

The minister’s clarification is expected to ease some of the immediate concerns surrounding the reports, although petrol prices and their wider effects on the economy remain significant issues for Nigerians.

For now, the Federal Government’s position, as stated by Oyedele, is that a fuel tax is not being considered.

Consumers and businesses will continue to monitor developments in the government’s fiscal policies and the petroleum market, particularly as the country grapples with high living costs and the effects of expensive energy on economic activity.