Kerosene, LPG, CNG Exempt from 5% Fuel Surcharge — Presidential Tax Committee

The Presidential Fiscal Policy and Tax Reforms Committee has clarified that household energy products like kerosene, cooking gas (LPG), and compressed natural gas (CNG) are exempt from the proposed 5% fuel surcharge under Nigeria’s new tax law.

Key Clarifications:

• The surcharge only applies to certain fossil fuels and does not include kerosene, LPG, CNG, or clean and renewable energy products—consistent with Nigeria’s energy transition priorities.

• It is not a new tax; rather, it was originally established under the Federal Roads Maintenance Agency (Amendment) Act of 2007 and was restated in the updated tax framework for clarity and transparency.

• More importantly, the surcharge will not take effect automatically in January 2026. It will only commence following a formal order from the Minister of Finance, to be published in the Official Gazette under Chapter 7 of the Nigeria Tax Act, 2025—a safeguard to ensure timing aligns with economic realities.

Context & Rationale:

• This surcharge is designed as a dedicated funding mechanism for road infrastructure and maintenance, aiming to improve travel safety, reduce travel time, and lower logistics and vehicle maintenance costs. These gains, in turn, are expected to benefit the broader economy.

• The exclusion of household and clean energy sources supports affordability and promotes the government’s goal of a sustainable energy transition.