Average Transport Fare Surges 98% After Fuel Subsidy Removal

By Adedapo Adesanya

* Cost of other alternatives transport soar in Review Month

** Ripples of fuel subsidy spur rise in food, rent, others

*** President Tinubu launches palliative measures to cushion effect

The average fare paid by commuters for bus journeys within the city per increased by 97.9 per cent from N649.59 in May 2023 to N1,285.41 in June 2023 as Nigerians grapple with a rise in prices after President Bola Tinubu announced the removal of fuel subsidy.

This was contained in the Transport Fare Watch June 2023 released by the National Bureau of Statistics (NBS) over the weekend, confirming the grim reality that the average commuting Nigerian faces on a daily basis.

In the report seen by Business Post, it was shown that on a year-on-year basis, the average cost of bus fare rose by 120.63 per cent from N582.61 in June 2022 to N1,285.41 in the review month.

In another category, the average fare paid by commuters for bus journey intercity rose by 42.1 per cent on a month-on-month basis to N5,686.49 in June 2023 from N4,002.16 in May 2023. On a year-on-year basis, the fare rose by 55.3 per cent from N3,662.87 in June 2022.

President Tinubu during his inauguration speech on May 29 announced that fuel subsidies, which gulped N4.3 trillion alone in 2022, were no more since the administration of Mr Muhammadu Buhari did not make provisions beyond June 2023 in the budget.

This caused an instant surge of over 40 per cent, creating a ripple effect in other basic needs like food, shelter, and other transportation alternatives over demand increase.

In air travel, the average fare paid by air passengers for specified routes’ single journeys increased by 4.9 per cent from N74,948.78 in May 2023 to N78,640.54 in June 2023. On a year-on-year basis, the fare rose by 40.2 per cent from N56,082.64 in June 2022.

The average transport fare paid on commercial motorcycle, otherwise known as Okada transportation was N618.52 in June 2023, 33.1 per cent higher than the rate recorded in May 2023 (N464.55). On a year-on-year basis, the fare rose by 48.3 per cent when compared with June 2022 (N416.97).

For water transport (waterway passenger transportation), the average fare paid in June 2023 increased to N1,366.22 from N1,045.15 in May 2023. On a year-on-year basis, it increased by 44.8 per cent from N943.26 in June 2022.

On state profile analysis, Bauchi state recorded the highest bus journey within the city (per drop constant route) in June 2023 with N1,700.00, followed by Jigawa with N1,570.00. On the other hand, Imo state recorded the least with N710.00, followed by Adamawa with N840.00.

For intercity bus travel (state route charged per person fare), the highest fare was recorded in Abuja with N8,500.00, followed by Anambra with N8,000.00. The least fare was recorded in Kwara with N3,400.00, followed by Zamfara with N3,700.00.

Similarly, Delta State recorded the highest air transport charges (for specified routes single journeys) with N87,000.00, followed by Kebbi with N83,500.00. Conversely, Abia recorded the least fare with N70,000.00, followed by Niger with N73,000.00.

Also, Lagos state had the highest motorcycle transport fare in June 2023 with N900.00, followed by Taraba with N850.00. The least fare was recorded in Edo with N250.00, followed by Bayelsa with N300.

In terms of water transport fare, the highest was in Rivers with N5,000.00, followed by Bayelsa with N4,500.00, while the least fare was recorded in Borno with N450.00, followed by Kebbi and Gombe with N500.00 each.

Analysis by zone showed that in June 2023, transport fares of bus journeys within the city recorded the highest in the South-South with N1,411.67, followed by the North-East with N1,318.33, while the South-East recorded the least with N1,162.00.

In terms of bus journey intercity, the South-East had the highest fare with N5,950.03, followed by the South-West with N5,916,67, while North-Central recorded the least with N5,398.57. The North-East recorded the highest fare of air transport in June 2023 with N80,650.00, followed by the South-South with N80,000.00, while the North-Central had the least with N76,357.14.

Also, commuters on a motorcycle (Okada) paid the highest fare in the North-East and South-West with N690.00 each, followed by the North-Central with N667.14, while the North-West recorded the least with N473.57. The South-South zone had the highest fare on water transport with N3,533.33, followed by the South-West with N1,275.00, while the North-East had the least with N783.33.

President Tinubu in a television broadcast on Monday, July 31, announced over $500 million financial package to assist households hurt by his economic reforms.

He defended his decision to scrap the fuel subsidy, saying it only benefited a few so-called elites, saying he was aware of the hardships that the decision caused citizens and promised his government was working to help.

The latest measures announced by the president include allocations for a review of the minimum wage, support for micro-, small- and medium-scale enterprises, and the purchase of 3,000 gas-powered buses to reduce the cost of transportation.

President Tinubu also ordered the immediate release of 200,000 metric tons of grains to households, in an effort to lower prices and 225,000 metric tons of fertilizers, seedlings and other inputs to farmers.