FG Implements 0.5% Levy on Fuel Wholesalers

The Federal Government has strengthened regulatory oversight in the downstream petroleum sector with the enforcement of a 0.5 per cent levy on the wholesale price of petroleum products and natural gas, as outlined in the newly published Midstream and Downstream Petroleum Operations Regulations, 2025. Under the regulations, petroleum product suppliers are required to collect and remit the levy from wholesale customers, making compliance a condition for licensing and continued operation in the sector. Section 47 of the Petroleum Industry Act establishes the Authority Fund, which will receive funds from various sources, including “0.5 per cent of the wholesale price of petroleum products sold in Nigeria, collected from wholesale customers.” The NMDPRA clarified that suppliers, not the regulator, are responsible for collecting the levy from wholesale customers for both imported and locally refined products. The levy is calculated as 0.5 per cent of the wholesale price and forms part of the overall cost. It must be remitted to the Authority Fund within 21 days of the month following the sale. Suppliers are also required to pay an additional 0.5 per cent of the wholesale price of petroleum products and natural gas to the Midstream and Downstream Gas Infrastructure Fund, following the same collection and remittance rules. Suppliers must include the levies in purchase agreements, invoices, receipts, and any other documentation evidencing the sale of petroleum products or natural gas. They are also required to submit monthly reports to the NMDPRA detailing volumes sold, prices, wholesale customers, and supporting documentation. Upon verification of payment, the NMDPRA will issue receipts to suppliers, who must provide copies to wholesale customers. The regulator will monitor wholesale points to ensure compliance with the issuance of quantity and quality certificates and the reconciliation of products sold. Non-compliance will attract sanctions, including an administrative penalty of 10 per cent of unpaid levies per month and possible suspension of the supplier’s licence or operations until all dues are settled. This move reinforces the Federal Government’s efforts to tighten oversight, ensure proper revenue collection, and maintain accountability in the downstream petroleum sector.