Intra-city transportation costs have risen nearly four times since 2017
By Jeph Ajobaju, Chief Copy Editor
Average transport fares within Nigerian cities rose nearly four times between 2017 and 2021, a graphic picture of how life would have been made unbearable if fuel subsidy were to be removed by June 2022 as Abuja had planned.
The latest report of the National Bureau of Statistics (NBS) shows that the average cost of bus transportation within cities rose 283 per cent from N122.83 in January 2017 to N470.83 in December 2021, a difference of N348 in the five years.
Transport cost has a direct correlation with the cost of everything else, big and small items, from everyday household stuff like salt and pepper to luxury ones like computers and cars.
Central Bank of Nigeria (CBN) Godwin Emefiele recently reiterated that transportation cost is the major cause of the surge in food inflation.
And NBS data shows that after eight months of decline, headline inflation rate rose to 15.36 per cent in December 2021 from 15.50 per cent in November.
This increase threatens key assumptions in the 2022 budget which projects inflation at 13 per cent.
The World Bank has disclosed that Nigeria may have one of the highest global inflation rates in 2022, with increasing prices diminishing the welfare of households.
Intra-city transport costs
In 2017, Abuja had the highest intra-city bus transport fare at N290.55 while Borno had the lowest (N50), according to the NBS.
In 2021, Zamfara had the highest (N700.22), Abia the lowest (N294.44).
The lowest cost in 2021 was 2.4 times higher than the average cost in 2017.
The average cost of bus transportation from one city to another jumped from N1,430.63 in January 2017 to N2,784.92 in December 2021.
Despite the huge lift in the cost of bus transportation, the average pump price of petrol rose only 11.48 per cent in the five years.
Fuel price increased from N148.7 in January 2017 to N165.77 in December 2021.
Like the cost of bus transportation, the cost of fuel subsidy has also been rising.
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Fuel subsidy in 2017
Per The PUNCH reporting, the Nigerian National Petroleum Company (NNPC) disclosed in 2017 that it spent N144.53 billion on fuel subsidy as follows:
- January – N37.26 billion
- February – N6.3 billion
- March – N8.207 billion
- April – N8.207 billion
- May – N7.743 billion
- June – N11.79 billion
- July – N10.25 billion
- August – N7.939 billion
- September – N7.522 billion
- October – N6.849 billion
- November – N16.785 billion
- December – N15.677 billion
Fuel subsidy in 2021
The NNPC disclosed in 2021 that fuel subsidy cost N1.43 trillion. It did not publish the amount for January but did for the remaining months as follows:
- February – N25.37 billion
- March – N60.39 billion
- April – N61.96 billion
- May – N126.29 billion
- June – N164.33 billion
- July – N103.28 billion
- August – N173.13 billion
- September – N149.28 billion
- October – N163 billion
- November – N131.4 billion
- December – N270.83 billion
Rising national debt
Fuel subsidy rose 889.41 per cent in the five years. And Finance Minister Zainab Ahmed says extending it by 18 months to mid 2023 will cost additional N3 trillion.
The PUNCH adds that economic and energy experts continue to decry the rising cost of fuel subsidy, with the World Bank and the International Monetary Fund (IMF) both arguing that the fund should be used instead to build infrastructure.
Muhammadu Buhari plans to push public debt to N50.22 trillion by 2023, with domestic debt at N28.75 trillion and external debt at N21.47 trillion, according to projections in the National Development Plan 2021-2025.
Economists warn Abuja about the implications of rising fuel subsidy which they say benefit the rich more than the poor.
But Olalekan Aworinde, a senior lecturer in economics at Pan Atlantic University, Lagos said: “If subsidy should stay, the government will continue to accumulate debt. And we have trillions of debt already to service, consuming our revenue.
“These are some of the things we have to think about. Nigerians do not trust their government on the proper management of the money saved from fuel subsidy.”