Taiwo Oyedele Clarifies 5% Petrol Tax: Revenue to Fund Transport Infrastructure Amid Tinubu’s Record-Breaking Tax Gains

In a move that has reignited debates across Nigeria’s socio-economic landscape, Taiwo Oyedele, a key government tax and policy adviser, has provided clarification on the new 5% petrol consumption tax set to take effect from January 2026, which will be added on top of the existing 7.5% VAT.

Oyedele explained that the revenue generated from the new tax will be dedicated to transport infrastructure development, aimed at reducing logistics costs, improving supply chain efficiency, and easing inflationary pressures on Nigerians. “This is not merely a revenue measure,” Oyedele said. “It is an investment in the country’s infrastructure that will ultimately lower the cost of living and strengthen economic growth.”

Tax Reforms and Fiscal Ambitions

Since taking office in May 2023, President Bola Ahmed Tinubu has championed a tax-first economic philosophy, earning both praise and criticism. Early in his tenure, the government removed fuel subsidies, a move that immediately pushed petrol prices higher and triggered widespread economic strain.

Despite the controversy, the administration’s aggressive revenue collection strategy appears to be paying off. At a recent celebration, the president boasted that government revenue had surpassed annual targets, crediting non-oil tax revenue exports as the key driver. Tinubu, in his signature flamboyant style, quipped that if this trend continued, “then even U.S. President Donald Trump should be dumb and dust.”

Analysts note that Tinubu’s tax-centered approach is deeply rooted in his Lagos governance model, where rigorous taxation helped transform the state into Nigeria’s richest subnational economy. “His fingerprints are taxes,” an economist once remarked. “And he never forgets where the honey lies.”

What This Means for Nigerians

For ordinary Nigerians, the new petrol tax signals a dual reality. On one hand, there is the promise of improved roads, transport systems, and logistics efficiency, which could gradually bring down operational costs for businesses and reduce inflationary pressures. On the other hand, households are already grappling with higher fuel costs, rising electricity tariffs, and surging food prices, making the additional levy a tangible financial burden.

Financial analysts suggest that the 5% levy on petrol consumption could add significantly to household expenses, but if effectively channeled into transport infrastructure, it might deliver long-term economic relief by cutting logistics costs and improving the ease of doing business.

Feature: Transport Projects to Benefit from the 5% Tax

According to government sources, several high-priority transport projects have been earmarked to receive funding from the new petrol levy:

1. Lagos-Ibadan Expressway Upgrade – Widening lanes and repairing deteriorating sections to improve cargo and passenger movement between the economic hub and the hinterland.
2. Apapa Port Access Roads Modernization – Reducing congestion in and around Lagos port areas to lower logistics and shipping costs.
3. Second Niger Bridge Completion – Final phases of construction and related road networks to boost inter-state trade and connectivity in South-East Nigeria.
4. Abuja-Kaduna-Zaria Rail Expansion – Enhancing passenger and freight rail capacity to reduce dependency on road transport.
5. Lagos-Badagry Coastal Road Development – Supporting the emerging deep-sea port and easing freight transit in the West.
6. Rural Road Rehabilitation Projects – Connecting agricultural hubs in Northern and South-Eastern states to major markets, cutting post-harvest losses.
7. Smart Traffic Management Systems – Introducing intelligent traffic solutions in major cities to reduce travel time and fuel consumption.

“These projects are designed to reduce logistics costs, improve the supply chain, and ultimately ease inflation,” Oyedele emphasized. “Every litre taxed is an investment in smoother roads, safer travel, and stronger economic infrastructure.”

The Taxman’s Signature and Public Sentiment

Tinubu’s administration continues to signal that taxation will remain the backbone of non-oil revenue growth. Oyedele’s clarification emphasizes that the new tax is part of a broader fiscal strategy—one aimed at strengthening infrastructure and economic resilience rather than merely filling government coffers.

Yet, Nigerians are not blind to the pattern. The president’s tax-first philosophy, paired with agency levies and regulatory fees, has created a climate where almost every transaction carries a fiscal imprint. Citizens and businesses alike are left balancing the hope of infrastructural dividends against the reality of immediate costs.

As the 2026 implementation date approaches, the nation watches with cautious optimism. If the fuel tax is invested wisely in roads, rail, and logistics infrastructure, it could reduce the cost of goods, stimulate economic activity, and ease inflation. If mismanaged, however, it risks deepening financial strain for households already under pressure.

In a country where taxes often spark both debate and action, Oyedele’s clarification serves as both a reminder and a warning: the era of Tinubu’s taxes is here, and Nigerians must prepare for the fiscal reality that underpins his vision for a modern, revenue-driven economy.