Human rights lawyer and Senior Advocate of Nigeria (SAN), Mr. Femi Falana, has urged the Federal Government to drop its planned five per cent fuel tax on petroleum consumers, insisting that restoring the existing Federal Roads Maintenance Agency (FERMA) user’s charge remains the viable option.
The Nigeria Tax Administration Act 2025 stipulates a five per cent surcharge on fossil fuel products, excluding renewable energy, household kerosene, cooking gas, and compressed natural gas (CNG).
The surcharge is to be collected at the point of supply, sale, or payment.
Falana, speaking through the Alliance on Surviving COVID-19 and Beyond (ASCAB), argued that reinstating the FERMA user’s charge and ensuring transparency in its management offers a more credible alternative to the controversial tax.
Defending the policy, the Minister of Finance, Mr. Wale Edun, said the surcharge was not a new levy, but a provision originally introduced under the FERMA Act 2007.
He explained that its inclusion in the new law did not automatically amount to imposing fresh taxes.Similarly, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, said the surcharge was designed to generate funds for rehabilitating Nigeria’s dilapidated roads.
While acknowledging inflation concerns, he maintained that improved infrastructure would eventually cut transportation costs.
But Falana countered, stressing that this was the first time a direct fuel tax was being imposed on consumers.
He cited Section 14(h) of the FERMA Amendment Act, which already established a five per cent user’s charge on petrol and diesel, with 40 per cent of proceeds allocated to FERMA and 60 per cent to state road agencies.
He recalled that the Act mandated accountability, requiring FERMA to publish details of the fund’s utilisation.
Yet, when he requested the agency’s accounts in 2011 under the Freedom of Information Act, FERMA denied receiving the charge.
Following the revelation, government released N832 million for road repairs, though larger funds remained unaccounted for.
“In October 2022, Senator Gershom Bassey revealed that the Federal Government owed FERMA N1 trillion. Instead of burdening Nigerians with a new tax, government should remit the outstanding funds and ensure proper deduction and disbursement of the user’s charge as originally provided by law,” Falana said.
The planned surcharge has already sparked widespread public outcry, with labour unions threatening strike action if it goes ahead.
In response, the government clarified that no commencement order had yet been issued for its implementation.