The Federal Government of Nigeria, in collaboration with the House of Representatives, is pressing ahead with the enforcement of a 5 percent road user charge on petroleum products. The development, if implemented, may trigger a fresh wave of price increases for Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), more commonly known as diesel.
This revelation came during an investigative hearing held by the House Ad-Hoc Committee in Abuja on Monday. The hearing focused on the long-standing non-implementation of the Federal Roads Maintenance Agency (FERMA) Amendment Act of 2007, which mandates a 5 percent charge on petroleum products to finance road maintenance across the country.
According to the Minister of State for Works, Mohammed Goroyo, Nigeria faces a massive N800 billion annual funding gap for road repairs. However, the actual budgetary allocations have been alarmingly inadequate — with N76.3 billion allocated in 2023, N103.3 billion in 2024, and N168.9 billion proposed for 2025.
Goroyo said the federal government can no longer rely solely on the national budget to fund road infrastructure. He emphasized the urgency of implementing the 5 percent user charge to support sustainable road maintenance.
“FERMA requires an estimated N880 billion annually for optimal road conditions. The consequences of inadequate funding are glaring—worsening road conditions, skyrocketing repair costs, and daily hardships for Nigerian road users,” Goroyo warned.
Also speaking at the hearing, Chukwuemeka Abbasi, the Managing Director of FERMA, criticized the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for failing to implement the pricing template that includes the 5 percent road user charge.
Abbasi argued that the funds are crucial for the rehabilitation of Nigeria’s decaying road network, which continues to deteriorate due to heavy commercial and personal vehicle usage, poor construction standards, and lack of preventive maintenance.
“The five percent charge was established as a sustainable funding model, but FERMA has struggled for years due to severe underfunding,” Abbasi said.
Speaker of the House of Representatives, Tajudeen Abbas, and Committee Chairman Francis Waive clarified that the initiative is not about introducing a new tax or amending the law. Instead, it is a move to enforce an existing legal provision that has been ignored for over a decade.
Waive emphasized that the committee’s goal is to correct the implementation anomalies and ensure government agencies comply with laws passed by the National Assembly.
“This is not a fresh levy or price increase decision. The law has been in place since 2007. What we seek is compliance and accountability,” he explained.
The timing of this move is raising eyebrows, especially among fuel consumers and stakeholders in the downstream sector. Just weeks ago, NNPC Retail, Dangote Refinery, and other partners slashed pump prices of PMS to N875 and N895 per litre in Lagos and Abuja, citing market stabilization and local refining gains.
Analysts now warn that any fresh cost element could undo recent price reductions and drive inflation higher, especially in transport and logistics sectors already burdened by rising operational costs.
Reacting to the development, energy sector experts urged the government to clearly communicate the mechanics of the proposed charge, including who bears the cost — marketers or end-users — and how the revenue will be transparently managed.
“Nigerians need clarity. If this charge is eventually added to pump prices, the public deserves assurance that the funds won’t be mismanaged,” said Abdulrahman Balogun, an energy analyst.
As the House of Representatives concludes its investigations, stakeholders await the final recommendations — a decision that may determine whether Nigerians face a fresh spike in fuel and diesel prices or see long-neglected roads finally get the funding they deserve.