Nigerians may soon face higher fuel and diesel prices as the Federal Ministry of Works and House of Representatives intensify efforts to implement a 5 percent road user charge on petroleum products, a development that could reverse recent price reductions in the sector.

This was revealed during an investigative hearing by the House of Representatives Ad-Hoc Committee in Abuja on Monday, where government officials emphasized the urgent need for the charge to fund road maintenance across the country.

Minister of State for Works, Mohammed Goroyo, highlighted that the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) needs to implement the collection of the 5 percent road user charge to address the significant funding deficit for federal road maintenance.

"FERMA requires an estimated N880 billion annually for optimal road conditions. Budgetary allocations have consistently fallen short—N76.3 billion in 2023 and N103.3 billion in 2024, while N168.9 billion was budgeted for 2025," Goroyo stated.

He added that the consequences of inadequate funding are evident in deteriorating road conditions, increased repair costs, and prolonged disruptions for commuters and businesses.

Charge Already in Law But Never Implemented

Chukwuemeka Abbasi, Managing Director of the Federal Road Maintenance Agency (FERMA), disclosed that the template for deducting the road user charge from petrol and diesel prices was never implemented by NMDPRA, despite being enshrined in the FERMA Act.

"The five percent user charge, as enshrined in the FERMA Act, was designed to serve as a sustainable funding mechanism for road maintenance and rehabilitation. However, for years, FERMA has grappled with severe funding inadequacies, hampering its ability to maintain our vast road network effectively," Abbasi explained.

House of Representatives Speaker Tajudeen Abbas recalled that on March 19, the House considered a motion revealing the non-implementation of remittance of the five percent user charge on petroleum products meant for road maintenance under the FERMA Amendment Act of 2007.

Francis Waive, chairman of the committee, clarified that the 5 percent road user charge is not a new attempt to increase petroleum product prices or amend existing law, as it has been part of the legislation since 2007. He emphasized that the investigation aims to address anomalies arising from non-compliance with existing laws.

Potential Impact on Recent Price Reductions

The push for implementing the road user charge comes at a time when Nigerians have been experiencing a drop in fuel prices. Recently, the Nigerian National Petroleum Company Limited retail outlets, Dangote Refinery, and partners reduced their retail prices of Premium Motor Spirit (PMS) to N875 and N895 per litre in Lagos and Abuja respectively.

If implemented, the 5 percent charge would likely reverse some of these gains, potentially increasing the financial burden on consumers and businesses already struggling with high transportation costs.

The House committee has indicated its determination to ensure compliance with the law, suggesting that implementation of the charge may be imminent despite potential public resistance to any new increases in fuel prices.