Falana Faults 5% Fuel Surcharge, Warns Against Full Subsidy Removal

Human rights lawyer Femi Falana has criticised the proposed 5% fuel surcharge, warning that it would worsen the economic hardship Nigerians already face.

Speaking on Sunday Politics on Channels Television, the Senior Advocate of Nigeria argued that the Federal Government should first account for unremitted funds owed to the Federal Roads Maintenance Agency (FERMA), estimated at over ₦1 trillion, before imposing fresh levies.

“It is the Federal Government that is owing, not the Nigerian people,” Falana said.

FERMA Funds Dispute

Falana explained that Section 14 of the FERMA Act 2007 provided for a 5% user charge on fuel sales — with 40% earmarked for federal roads and 60% for state roads. However, he said the provision was never implemented.

Between 2007 and 2011, deductions were made at source by regulators but never remitted to FERMA. Following public pressure, only ₦832 million was released in 2011, leaving a massive backlog. By 2022, the Senate confirmed government debts to FERMA had risen to about ₦1 trillion.

“The money was deducted but not remitted. This new surcharge amounts to multiple taxation. Government must explain what happened to the earlier deductions,” Falana insisted.

Warning Against Full Subsidy Removal

Falana also cautioned against a complete removal of fuel subsidies, describing the move as “economically unrealistic and socially insensitive.”

“No country abolishes all subsidies. Even the US and UK subsidise electricity, agriculture, and essential services,” he said, warning that IMF and World Bank prescriptions must not dictate Nigeria’s economic policies.

“You cannot devalue the naira, dollarise the economy, remove subsidies, and at the same time increase politicians’ salaries,” he argued.

Government Response

Presidential Tax Committee Chair Taiwo Oyedele clarified that the 5% surcharge originates from the 2007 FERMA Act, while Finance Minister Wale Edun stressed there is no immediate plan to enforce it. He said the inclusion in the 2025 Tax Act was meant to harmonise existing laws, not to impose a new levy without due process and consultations.

Despite the assurances, labour unions remain sceptical, warning that the surcharge amounts to a direct “pump tax” and threatens to trigger fresh nationwide strikes.