Possible Fuel Price Increase as House of Reps Pushes for 5% Road User Charge Implementation

The Federal Ministry of Works and the House of Representatives are advocating for the enforcement of a 5 percent road user charge on fuel and diesel prices, a move that could lead to an increase in the cost of premium motor spirit (PMS) and automotive gas oil.

The proposal was highlighted during an investigative hearing by the House of Representatives Ad-Hoc Committee in Abuja on Monday.

Minister of State for Works, Mohammed Goroyo, emphasized the urgent need for the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to begin collecting and remitting the 5 percent road user charge. The charge aims to address the significant funding gap in Nigeria’s federal road maintenance budget. Goroyo stated that Nigeria requires about N880 billion annually for road upkeep, but the Federal Roads Maintenance Agency (FERMA) has been receiving far less.

“FERMA needs approximately N880 billion yearly for optimal road conditions. However, budget allocations have fallen short: N76.3 billion in 2023, N103.3 billion in 2024, and N168.9 billion for 2025,” he said.

He warned that without this funding, road conditions will continue to deteriorate, leading to higher repair costs and prolonged disruptions for commuters and businesses.

Chukwuemeka Abbasi, Managing Director of FERMA, disclosed that the mechanism to deduct the 5 percent road user charge from petrol and diesel prices was never implemented by NMDPRA. He described the charge as a sustainable funding source enshrined in the FERMA Act but lamented that FERMA has struggled with chronic underfunding, limiting its ability to maintain the country’s roads effectively.

House Speaker Tajudeen Abbas recalled that the House had already raised the issue in a plenary motion on March 19, highlighting the failure to remit the 5 percent user charge on petroleum products as stipulated by the FERMA Amendment Act, 2007.

Francis Waive, chairman of the Ad-Hoc Committee and House Committee on Rules and Business, clarified that the 5 percent road user charge is not a new tax or an amendment to existing law—it has been part of the legal framework since 2007. The committee’s investigation seeks to ensure compliance with the law by both individuals and government agencies.

This development comes amid recent drops in petrol prices. Retail outlets of the Nigerian National Petroleum Company Limited (NNPC), Dangote Refinery, and its partners have recently lowered the price of PMS to between N875 and N895 per litre in Lagos and Abuja.