The Federal Government has announced that from January 2026, Nigerians will begin paying a ₦500 tax for every ₦10,000 worth of petrol purchased.
The new law is a newly approved petrol consumption levy introduced by the Tinubu administration.
The levy represents 5% of total petrol expenditure.
This is part of government efforts to discourage heavy reliance on fossil fuels and encourage the adoption of cleaner and renewable energy sources.
Also, officials emphasise that the tax will be deducted at the point of purchase.
This means consumers will see the extra ₦500 charge added to every ₦10,000 spent on petrol.
Importantly, the levy will not apply to kerosene, Liquefied Petroleum Gas (cooking gas), Compressed Natural Gas (CNG), or other clean energy alternatives,
This is in line with the government’s strategy to promote greener energy use across the country.
Government representatives maintain that revenues generated from the levy will be invested directly into climate change mitigation projects.
Also, renewable energy infrastructure, and environmental sustainability programmes.
They argue that such initiatives are crucial for Nigeria’s energy transition and its commitment to reducing carbon emissions in line with global climate agreements.
However, economists and social commentators are raising concerns.
Critics also highlight the regressive nature of the levy,.
They pointed out that a flat rate of ₦500 on every ₦10,000 purchase disproportionately affects low-income households.
Many argue that without adequate cushioning measures, the policy could deepen the economic hardship facing ordinary Nigerians.
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Despite these concerns, the Federal Government insists the levy is a necessary step in Nigeria’s long-term energy reform plan.
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