As Christmas approaches, many Nigerians are feeling the impact of skyrocketing transport costs, with November 2024 seeing a record-high transport inflation rate of 30.54%, according to the National Bureau of Statistics (NBS). This is the highest rate recorded this year and reflects the mounting challenges commuters and businesses face due to escalating transportation expenses.
Transport inflation has been a persistent issue throughout 2024, consistently surpassing the levels recorded in 2023. In January 2024, the rate was 25.92%, significantly higher than the 21.02% recorded in January 2023. While it stabilized mid-year at around 25.63%, it surged again to 27.21% in September following an increase in fuel prices. By November, the rate hit 30.54%, marking a 3.52% increase compared to the same period in 2023.
Key Drivers of Rising Costs
The removal of fuel subsidies, announced shortly after President Bola Tinubu assumed office in May 2023, has been a primary factor driving the increase in transport costs. The policy aimed to stabilize public finances and spur economic growth but led to sharp rises in petrol and diesel prices, essential inputs for road and public transport.
“The removal of subsidies was supposed to help the economy, but it has significantly raised transportation costs,” said a Lagos commuter, who explained how the increase had affected her daily expenses.
Adding to the pressure, the naira’s depreciation has pushed up the cost of importing spare parts and vehicles. This has forced transport operators to pass on these higher expenses to passengers. Seasonal factors, such as the festive period, have further strained the system as travel demand peaks.
Poor road infrastructure and limited alternatives, like rail transport, have compounded the challenges.
“The government needs to fix our roads and make travel cheaper,” said a frustrated bus driver in Abuja.
Petrol Prices Under Tinubu’s Administration
Fuel price increases under Tinubu’s presidency have been particularly painful for Nigerians. When Tinubu took office in May 2023, petrol cost N175 per litre. By October 2024, it had soared to N1,060 per litre, a staggering 505.71% increase.
“This level of price hike is unsustainable for ordinary Nigerians,” noted a market trader in Kano, struggling to afford daily transport costs.
Under Tinubu, transport inflation rose by 6.67 percentage points in 18 months, from 23.87% in May 2023 to 30.54% in November 2024. Similarly, headline inflation climbed from 22.41% in May 2023 to 34.60% in November 2024—the highest in nearly three decades.
Efforts to Mitigate Costs
In a bid to relieve the burden on Nigerians, the Federal Government has announced several measures for the holiday season. President Tinubu approved free nationwide train rides from December 20, 2024, to January 5, 2025, to ease travel expenses. Additionally, the government introduced a 50% reduction in interstate transport fares for the Christmas and New Year periods.
This decision followed an agreement between the government and transport unions, including the National Union of Road Transport Workers and the Road Transport Employers Association of Nigeria. Under the agreement, passengers traveling from major hubs like Abuja and Lagos will pay half the usual fares.
PETROAN’s National Public Relations Officer, Dr. Joseph Obele, expressed optimism that petrol prices might drop further by January 2025 due to falling global crude oil prices and the naira’s recent gain against the dollar.
“The reduction in petrol prices will bring relief to Nigerians during this festive season,” Obele stated.
The Federal Government’s efforts have been welcomed by transport operators and passengers alike.
PETROAN President Billy Harry commented, “These measures will provide much-needed relief to Nigerians during this holiday season.”
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Broader Economic Concerns
While temporary relief measures are welcome, many Nigerians remain concerned about the broader economic implications of rising transport costs. Businesses, especially small and medium enterprises, are grappling with increased logistics costs, forcing them to raise prices for goods and services.
A recent report revealed that the Nigerian National Petroleum Company Limited (NNPCL) requested an additional N1.19 trillion subsidy refund in July 2024 due to exchange rate fluctuations. This has raised questions about the sustainability of the partial subsidy framework.
Amid these challenges, experts warn that further efforts are needed to address systemic issues in the transportation and energy sectors.
“The government must implement long-term policies to stabilize prices and improve infrastructure,” said an economist based in Lagos.
The Way Forward
As Nigerians prepare for the Christmas season, the strain of high transportation costs remains a pressing concern. While government measures offer temporary relief, structural reforms are urgently needed to address the underlying causes of transport inflation and ensure long-term economic stability.
For now, commuters and businesses continue to navigate these challenges, hoping for better days ahead.