The Federal Government will introduce taxes on petroleum products only when the economy has stabilised and Nigerians’ incomes are strong enough to withstand the additional financial burden, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.
Oyedele disclosed this during an interview with the media on the sidelines of the 2026 International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, on Monday.
He explained that the government’s immediate focus was to consolidate ongoing economic reforms, restore economic growth and improve household incomes before considering additional taxes on fuel.
According to the minister, imposing fuel taxes immediately after the removal of petrol subsidies would further strain Nigerians already dealing with higher living costs.
“You remove subsidy, you can’t immediately impose taxes. That would be insensitive. You push the people to the wall,” he said.
Oyedele noted that fuel taxation was practised in many countries, including across Africa, where petroleum products often attract several different levies. He said taxes account for between 20 and 80 per cent of fuel prices in some countries.
However, he maintained that Nigeria must first improve its economic conditions and the purchasing power of citizens before adopting similar measures.
The minister argued that the affordability of goods and services should be assessed against people’s earnings rather than prices alone, stressing that efforts to suppress prices without improving incomes had not delivered lasting results.
“The objective should be that whatever, instead of trying to suppress prices, which hasn’t worked for us, it hasn’t worked for any country in the world, but not one, instead of trying to suppress prices, think about how to grow income faster than prices rise,” Oyedele said.
He added that the government’s broader economic objective was to expand prosperity and strengthen the middle class by ensuring that incomes grew faster than the cost of living.
The minister said revenue from any future fuel taxes would be earmarked for critical infrastructure, including road development, as well as the creation of strategic fuel reserves to help cushion the country against international supply disruptions and sudden price increases.
He explained that the reserves could provide the government with a mechanism to moderate the effects of future petroleum market shocks.
Oyedele also suggested that the tax framework could give the government room to temporarily suspend or reduce levies during periods of disruption, helping to manage fuel supply and prices.
He noted that several countries had responded to market shocks by reducing fuel taxes, but Nigeria lacked a similar mechanism because such taxes were not in place.
The minister further assured Nigerians that any decision to introduce the levies would follow the law and be made public through the required official gazette.
“The good thing is that the law says that tax cannot come into effect until there’s a gazette,” he said, adding that the government had no intention of introducing the taxes secretly.
Oyedele maintained that the timing of the proposed measures would depend on economic conditions and whether Nigerians could reasonably absorb the additional costs, insisting that the purpose and expected benefits of the taxes would be clearly communicated to the public.
