What Tinubu’s 5% Fuel Tax Really Means for Nigerians in 2026

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From January 1, 2026, Nigerians will begin paying more at the fuel pump as the Federal Government introduces a new 5% tax on petrol and diesel under the recently signed Tax Act. The levy, which the Tinubu administration says is designed to fund green energy initiatives and reduce dependence on fossil fuels, has already sparked nationwide outrage.

For everyday citizens, the impact is clear: fuel will become more expensive. The new tax means that if you buy ₦10,000 worth of petrol, you’ll now pay ₦10,500. A ₦20,000 purchase becomes ₦21,000, while ₦25,000 will cost ₦26,250. For a typical commuter in Lagos or Abuja who spends around ₦50,000 monthly on petrol, the added cost will amount to an extra ₦2,500 each month, or about ₦30,000 more over the course of a year.

Government officials argue that the policy is necessary to fund renewable energy projects, accelerate Nigeria’s shift toward cleaner alternatives, and boost public revenue following the removal of fuel subsidies. But many Nigerians believe the policy is unfair and regressive, hitting the poor and middle class hardest. Social media has been flooded with criticism, with many pointing out that people are effectively paying twice — first through higher fuel prices after subsidy removal, and now again with an additional tax layered on top.

The announcement has also triggered comparisons with neighboring countries, with some Nigerians questioning whether citizens in places like Ghana face similar fuel taxes. For many, the concern is less about climate policy and more about survival, as inflation continues to push food, transport, and housing costs beyond reach.

Economists warn that the ripple effect of the new levy will be felt across the economy. Transportation costs are likely to rise, which will in turn drive up the price of goods and services nationwide. Unless accompanied by targeted relief or subsidies for low-income households, the measure could deepen public discontent and widen the gap between government policy goals and the lived realities of ordinary Nigerians.

For now, the message is simple: when the law takes effect in 2026, every trip to the filling station will cost more — and Nigerians, already burdened by one of the toughest economic years in recent memory, will be left to absorb yet another blow.