morGANABLE Politics/Governance
Oyedele noted that taxation of petroleum products remained a common practice globally, explaining that several countries relied on fuel taxes to finance infrastructure development and manage economic uncertainties.
KaNo—
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said the Federal Government will not introduce additional taxes on petroleum products until Nigeria’s economy stabilises and citizens’ incomes improve sufficiently to accommodate the financial burden.
Oyedele explained that the government was prioritising economic recovery, sustainable growth and improved household purchasing power before considering the introduction of fuel taxes.
The minister disclosed this during an interview with ARISE News on the sidelines of the 2026 International Monetary Fund and World Bank Annual Meetings in Bangkok, Thailand, on Monday.
According to him, imposing additional taxes on petroleum products immediately after the removal of fuel subsidies would worsen the economic hardship confronting Nigerians.
“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 taxation of petroleum products remained a common practice globally, explaining that several countries relied on fuel taxes to finance infrastructure development and manage economic uncertainties.
“Now, if you look across the world, between 20 to 80% of price is taxes. Many of the countries in Africa have between six to 10 different taxes on fuel products,” he stated.
He, however, maintained that Nigeria must first address existing economic challenges and strengthen household incomes before adopting similar taxation measures.
The minister argued that the government’s economic strategy should focus on increasing citizens’ earnings rather than artificially suppressing commodity prices, which he described as an unsustainable approach.
He explained that although Nigerians frequently compared present commodity prices with those of previous decades, the more important consideration should be the relationship between income levels and purchasing power.
According to him, economic prosperity would depend largely on ensuring that household incomes grow faster than the prices of essential goods and services.
Oyedele said the Tinubu administration remained committed to implementing reforms aimed at expanding economic opportunities, improving productivity and strengthening the middle class.
“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,” he said.
He added that the proposed fuel taxes would only become necessary when economic conditions improved enough for Nigerians to absorb the additional costs without experiencing excessive financial pressure.
“So, at the appropriate time, when the economy has stabilised, and income level would be able to accommodate it, then those taxes will come,” Oyedele stated.
Explaining the purpose of the proposed taxation, the minister said revenue generated would be channelled towards critical road infrastructure and the establishment of strategic petroleum reserves.
He noted that such reserves could provide the government with an intervention mechanism during future disruptions in the global petroleum market.
According to him, establishing fuel reserves would strengthen Nigeria’s capacity to respond to supply shortages and sudden increases in international petroleum prices.
“Not because we want to impose taxes, it will be because those amounts of taxes will be dedicated into road infrastructure, they’ll be dedicated into building our fuel reserve, that can help us moderate prices of fuel products, if anything happens,” he explained.
Oyedele further disclosed that fuel taxes could serve as an economic buffer, allowing the government to temporarily suspend collections during periods of severe market instability.
He explained that several countries had previously reduced petroleum taxes to cushion consumers against rising prices, while Nigeria lacked a comparable mechanism.
The minister also assured Nigerians that the introduction of any petroleum tax would follow established legal procedures, stressing that the government would not implement such measures secretly.
He said the law required the publication of an official gazette before any proposed tax could take effect.
“The good thing is that the law says that tax cannot come into effect until there’s a gazette. There has to be an order published in the gazette by the finance minister, which means we can’t do it in secret,” he stated.
Meanwhile, Oyedele warned that reinstating petrol subsidies could trigger severe economic consequences, including capital flight, declining investor confidence and significant depreciation of the naira.
Speaking during a press briefing at the IMF and World Bank meetings, the minister cautioned that reversing the subsidy removal policy could push the exchange rate towards N3,000, N3,500 or even N4,000 against the United States dollar.
He explained that investors remained concerned about the possibility of the Federal Government abandoning its economic reforms ahead of the next general elections.
According to him, any indication that President Bola Tinubu’s administration was considering restoring petrol subsidies could immediately unsettle financial markets and increase Nigeria’s borrowing costs.
“If, for any reason, the President were to say we are merely considering the return of fuel subsidy, capital would react immediately,” Oyedele warned.
He added that such developments could encourage foreign investors and wealthy Nigerians to move their investments into dollar-denominated assets, thereby increasing pressure on the country’s foreign exchange market.
The minister maintained that the resulting currency depreciation would ultimately affect ordinary Nigerians through higher import costs, rising consumer prices and worsening economic hardship.
He argued that restoring subsidies might therefore produce consequences contrary to the intended objective of making petroleum products more affordable.
Oyedele also dismissed suggestions that the Nigerian National Petroleum Company Limited‘s temporary reduction in petrol retail margins amounted to the reinstatement of fuel subsidies.
He described the development as a commercial decision, explaining that a company voluntarily reducing its profit margin to lower consumer prices should not automatically be regarded as providing a government-funded subsidy.
The minister maintained that the administration would continue implementing its economic reforms while pursuing policies designed to strengthen investor confidence, promote sustainable growth and improve Nigerians’ purchasing power.
He reiterated that any future introduction of fuel taxes would depend on improved economic conditions, with the government expected to explain the justification and anticipated benefits before implementation.
