Taiwo Oyedele
Picnews
Taiwo Oyedele’s statement on May 6, 2026 that the presidency will not bring back fuel subsidy has drawn fresh attention to the Tinubu administration’s economic direction almost three years after the policy was scrapped. Oyedele, who serves as Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, made the remarks while addressing concerns over rising living costs and renewed public debate about whether the government should reverse course. He was clear that the subsidy regime had become financially unsustainable and was distorting the economy, arguing that its removal was a necessary step toward fiscal discipline and long-term growth.
Oyedele explained that the subsidy had been costing the government trillions of naira annually while benefiting mostly the wealthy and fuel smugglers rather than ordinary Nigerians. He said the funds previously spent on subsidizing petrol should instead be redirected into infrastructure, education, healthcare, and targeted social protection for vulnerable households. According to him, the administration remains committed to that path despite the short-term hardship that followed the May 2023 removal, and there is no policy reversal on the table at this time.
A significant part of his comments also addressed the proposed 5% fuel surcharge that has been generating controversy in recent weeks. Oyedele clarified that the surcharge is not a new tax created by the current administration but an existing provision under the Federal Roads Maintenance Agency Act of 2007 that has remained dormant for nearly two decades. The levy was originally designed to dedicate 40% of its proceeds to federal roads and 60% to state and local government roads, with the aim of creating a sustainable funding stream for Nigeria’s deteriorating road network.
However, Oyedele stressed that timing is critical and the surcharge will not be implemented now. He said the committee rejected a request from FERMA to begin collecting the levy immediately after subsidy removal because it would be insensitive to add another cost burden on Nigerians when inflation and transportation costs are already high. The new tax law includes a safeguard that requires the Minister of Finance to issue an official commencement order published in the gazette before the surcharge can take effect, ensuring transparency and accountability in its application.
He noted that the right conditions for introducing the surcharge would be either a significant appreciation of the naira or a drop in global crude oil prices, either of which would prevent the levy from pushing pump prices higher. For now, he said, the economic environment does not support it. This cautious approach reflects the committee’s broader philosophy of avoiding reforms that could worsen hardship without delivering immediate relief to households and businesses.
Oyedele also used the opportunity to highlight that tax reform may ultimately have a greater impact on Nigeria’s economy than subsidy removal. He pointed out that President Tinubu mentioned both subsidy removal and the reduction of multiple taxation in his inaugural speech on May 29, 2023, yet public attention has largely focused on fuel prices while the tax burden has received less scrutiny. Nigeria’s corporate tax rate, he argued, is among the highest globally when combined with various levies, and businesses face between 65 and 70 different taxes and charges that complicate compliance and drive up costs.
To address this, the committee’s reforms are designed to streamline the tax system by cutting the number of collectible taxes to about 10 and providing relief to small businesses and low-income earners. Under the new framework, businesses with annual turnover below ₦100 million will pay zero percent corporate tax, while roughly 97% of workers in the low and middle-income bracket will be exempted or relieved from several tax burdens. Essential goods and services such as food, education, and healthcare have also been classified as zero-rated for VAT, allowing producers to reclaim input VAT and lower overall production costs.
On the bigger economic picture, Oyedele acknowledged that savings from subsidy removal alone will not be enough to transform Nigeria’s economy. He compared Nigeria’s infrastructure-to-GDP ratio of about 30% to South Africa’s 85%, saying the gap directly undermines productivity and growth. He emphasized that without dedicated funding for roads and infrastructure, the economy cannot function efficiently because people and goods cannot move around at reasonable cost. The committee’s reforms, he said, are intended to simplify taxation, reduce bureaucracy by harmonizing NIN and BVN as tax IDs, and create a more predictable environment for investment and job creation.
