Obinna Ejianya Warns: Tinubu’s Proposed 5% Fuel Tax Could Deepen Nigeria’s Economic Hardship

Nigeria’s ongoing debates over taxation and economic reform took a new turn on Monday, September 8, 2025, as Obinna Ejianya, a Nigerian publisher based in Australia, raised serious concerns about President Bola Tinubu’s proposed 5% fuel tax. Ejianya, who has consistently commented on governance and development issues in Nigeria, warned that the move could worsen the economic hardship already faced by millions of citizens.

The proposed tax, which would apply to petroleum products across the country, is being promoted by the federal government as part of a wider revenue mobilization strategy. However, critics fear that it will further raise the cost of living in a country already grappling with high inflation, unemployment, and soaring fuel prices.

The Fuel Tax Proposal

President Tinubu’s administration has been working on a package of tax reforms designed to expand government revenue and reduce reliance on crude oil exports. Among the measures on the table is a 5% levy on petroleum products, a policy that government officials argue could generate billions in additional income annually.

Supporters of the plan say that the revenue will be channeled into infrastructure projects, debt servicing, and social welfare programs. They stress that without broadening the tax base, Nigeria risks further fiscal instability, especially as debt repayments continue to consume a significant share of national income.

But while the economic rationale may appear sound on paper, many Nigerians fear that the timing and nature of the tax could deepen poverty and trigger social unrest.

Ejianya’s Warning

Obinna Ejianya did not mince words in his reaction. Speaking from Australia, he described the policy as “a devastating blow” to Nigerians who are already struggling to cope with skyrocketing living costs.

According to him, the fuel tax would not only push up transport fares and food prices but also erode the already weakened purchasing power of ordinary Nigerians. “At a time when families are cutting down meals and businesses are collapsing under high energy costs, introducing a new fuel tax is nothing short of cruel,” he reportedly said.

Ejianya further argued that the government should focus instead on cutting wasteful spending, tackling corruption, and investing in local refining capacity rather than introducing more taxes. He noted that Nigeria’s heavy dependence on imported refined petroleum products makes the population particularly vulnerable to price shocks.

Impact on Nigerians

If implemented, the 5% fuel tax would have ripple effects across the economy. Petroleum products are at the heart of Nigeria’s energy supply and transportation system, meaning almost every sector would feel the impact.

1. Transport Costs: Public transport fares are likely to rise almost immediately, hitting low-income earners the hardest.
2. Food Prices: With logistics costs higher, food items transported from rural areas to urban markets would become more expensive, worsening inflation.
3. Small Businesses: SMEs, which already spend heavily on fuel due to unreliable electricity supply, would see operating costs climb further.
4. Household Budgets: Families, many of whom are already rationing meals, would face further strain as daily expenses climb.

These outcomes could compound the ongoing cost-of-living crisis in Nigeria, where inflation has hovered above 25%, food insecurity is rising, and unemployment remains a pressing challenge.

Government’s Argument

The Tinubu administration has defended its revenue drive by pointing to Nigeria’s low tax-to-GDP ratio, which stands at about 10%, far below the African average of 18%. Government officials argue that without bold reforms, Nigeria will be unable to meet its development goals or stabilize its fiscal outlook.

In defending the proposed fuel tax, proponents highlight three key points:

• The need to raise sustainable revenue to finance infrastructure.
• The importance of reducing dependence on borrowing.
• The potential to create a fairer tax system by spreading the burden more evenly across sectors.

However, critics like Ejianya insist that any new tax policy must be weighed against its social consequences, particularly for vulnerable groups.

Public Reactions

Reactions from Nigerians both at home and in the diaspora have been largely negative. Civil society groups, labor unions, and consumer rights activists have warned that the fuel tax could trigger protests similar to the nationwide strikes that greeted the removal of fuel subsidies in 2023.

The Nigeria Labour Congress (NLC) has already hinted that it would oppose the policy, describing it as “anti-people” and “ill-timed.” Social media is also buzzing with conversations, with many Nigerians questioning whether the government truly understands the daily struggles of its citizens.

Economic Alternatives

Economists and policy experts have suggested alternative measures the government could adopt instead of a fuel tax:

1. Expand Local Refining: Investing in local refineries would reduce reliance on imported fuel and help stabilize prices.
2. Widen the Tax Net: Instead of raising rates, the government could focus on bringing more businesses and individuals into the formal tax system.
3. Curb Corruption and Waste: Billions are lost yearly to mismanagement; plugging these leaks could raise more revenue than a new fuel levy.
4. Promote Renewable Energy: Diversifying Nigeria’s energy base could ease reliance on petroleum and reduce vulnerability to price hikes.

What Next?

As debates continue, the fate of the proposed 5% fuel tax remains uncertain. The National Assembly would still need to deliberate and approve the measure before it becomes law. In the meantime, voices like Obinna Ejianya’s are adding weight to growing opposition from both civil society and ordinary Nigerians.

Whether the government chooses to push ahead or reconsider will send a strong signal about how it intends to balance revenue generation with social welfare in the years ahead.

Conclusion

The proposed 5% fuel tax has become one of the most controversial policies under President Tinubu’s administration. While the government sees it as a vital tool to raise revenue, many Nigerians view it as a step too far in an already fragile economy.

Obinna Ejianya’s warning from Australia reflects a wider sentiment that the government must tread carefully. If implemented hastily, the tax could worsen inflation, deepen poverty, and trigger public backlash.

Ultimately, the debate underscores a larger question: How can Nigeria raise the revenue it needs without pushing millions of citizens deeper into economic hardship? The answer to that question may shape the country’s economic trajectory in the years to come.