Transporters Adjust Fares amid Reduction in Fuel Prices Nationwide

• Commercial transport operators have hiked their fares despite the reduction in fuel prices and CNG availability
• Findings show that fares have remained unchanged since petrol prices were reduced from N1,200 per litre to N860
• However, commuters lament that the high fares were imposed by road transport unions on operators who pass them on to the passengers

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Commercial transport operators have increased their fares despite lower fuel prices and the introduction of compressed natural gas (CNG) as an alternative to petrol.

Passengers disclosed that the high fares charged by commercial transport operators affect their earnings.

Passengers lament high fares despite low fuel prices

The passengers revealed that most of the fares are set by transport unions for the operators, who then pass them on to the commuters.

According to them, fares have remained the same since petrol prices crashed from N1,200 per litre to N860 and currently N930, saying that fares have risen by 400% since President Bola Tinubu removed the fuel subsidy in 2023.

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Checks reveal that commercial transport operators pay about three levies in every park, depending on the leadership and transport union responsible.

The levies include booking fees, loading fees, and ticket fees paid daily to the unions at the motor parks.

Intercity transport fares rise

However, data from the National Bureau of Statistics (NBS) disclosed that the average fare paid for intercity transport in Nigeria in April rose to N7,122.75 from N3,994.51 in 2023.

The NBS report also disclosed that a minor decrease of 0.43% per month was recorded during the period, with average fares falling from N7,152.97 in March last year.

Legit.ng previously reported that in the last 22 months, petrol prices have jumped significantly, hovering between N800 and N900 per litre, with projections suggesting they may rise above N930 per litre 

High transport costs affect household income

Transporters, on their part, increased the cost by 20 to 100% over the period. 

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The spike has increased logistics expenses for food traders, who pass the cost onto Nigerians buying at the market. 

Many families now struggle to afford three square meals daily. 

According to SBM Intelligence, Nigeria’s transport costs have increased over the last seven years.

Interstate fares rise by 400%

Bus fares for interstate travel rose by 403.5%, airfares by 280.7%, and water transport fares by 148.8% over the period.

The report further revealed that three out of 10 Nigerian workers spend over 20% of their salary on transportation, underscoring the heavy financial burden caused by rising transport costs.

Samson G. Simon, chief economist at ARKK Economics and Data Limited, noted that even employed Nigerians struggle to afford nutritious diets due to shrinking disposable incomes, BusinessDay reports.

Transport companies increase fares

Legit.ng earlier reported that the NBS had disclosed that the average fare paid by commuters for bus journeys between cities was N7,117.17 per drop in July 2024.

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This represented a 20.23% decline in transport costs compared to the average N5,919.49 recorded in July 2023.

When comparing July's average fare to N7,092.03 paid in June 2024, the cost of transportation from one state to another increased by 0.35% month over month.

Proofreading by Kola Muhammed, copy editor at Legit.ng.

Source: Legit.ng