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Fuel Scarcity: Transport Fares Rise by 24%, Says NBS

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Kerosene
  • Fuel Scarcity: Transport Fares Rise by 24%, Says NBS

The fuel scarcity currently being experienced in many parts of the country is taking its toll on Nigerians, with the average cost of transportation rising by 23.99 per cent in December, an analysis of a report prepared by the National Bureau of Statistics has revealed.

The report for December 2017 covers bus journey within the city; bus journey intercity, state route, charge per person; air fare charge for specified routes single journey; journey by motorcycle (Okada); and waterway passengers’ transport.

The average fare paid by commuters for bus journey within the city increased by 23.99 per cent month-on-month and 14.78 per cent year-on-year to N171.34 in December 2017 from N138.19 in November 2017, the report stated.

The report, which was obtained on Friday by our correspondent, said states with the highest bus journey fare within city in December 2017 were Cross River (N242.73), Jigawa (N250.00) and the Federal Capital Territory (N375.63).

On the other hand, the report gave states with the lowest bus journey fare within city in December 2017 as Bauchi (N80), Anambra (N102.21) and Borno (N105.71).

It said, “Average fare paid by commuters for bus journey intercity increased by 14.04 per cent month-on-month and 5.22 per cent year-on-year to N1,716.26 in December 2017 from N1,505 in November 2017.

“States with the highest bus journey fare intercity in December 2017 were Abuja FCT (N5,019), Adamawa (N3,242) and Benue (N2,803) while states with the lowest bus journey fare within city in December 2017 were Yobe (N1,000), Enugu (N1,063) and Kano (N843.75).”

For air passengers with specified routes, the report said the average fare paid for a single journey increased by 2.75 per cent month-on-month and 8.58 per cent year-on-year to N33,386 in December 2017 from N32,492 in November 2017.

It explained that states with the highest air fare in December 2017 were the FCT (N49,500), Edo (N41,000) and Jigawa (N40,000) while states with the lowest air fare in December 2017 were Kogi (N25,000),Katsina (N26,000) and Nasarawa (N27,000).

For motorcycle commuters, the report said the average fare paid by them for a journey (per drop) increased by 15.93 per cent month-on-month and 2.20 per cent year-on-year to N112.19 in December 2017 from N96.77 in November 2017.

States with the highest journey fare by motorcycle (per drop) in December 2017 were given as Ondo (N197.67), Rivers (N194.29) and Bayelsa (N190) while states with the lowest journey fare by motorcycle in December 2017 were Ekiti (N56.15), Bauchi (N60) and Niger (N55.45).

Speaking on the impact of the fuel crisis on the economy, financial analysts said there was a need for the Federal Government to adopt a “smartcard initiative” to address the issue.

They said this would enable interested owners of commercial vehicles, including official vehicles owned by educational institutions, hospitals, religious bodies and government agencies to register and obtain smartcards for purchasing fuel at regulated prices from petrol stations owned by the Nigerian National Petroleum Corporation.

The Head, Banking and Finance Department, Nasarawa State University, Uche Uwalaka, while speaking during a chat with our correspondent, said the model which had already recorded huge success in Egypt and Libya would help to address the lingering issue of fuel scarcity in the country.

He said the need to adopt the model had become imperative following the claims that the N145 per litre pump price of petrol was no longer sustainable as a result of the high price of crude oil in the international market.

Uwaleke, an Associate Professor of Finance, recommended that with the smartcards which would be swiped at the NNPC filling stations, consumers would be able to buy a limited amount of subsidised fuel, and would need to pay a market price for any extra amount of fuel needed.

He added that private car owners, on the other hand, would be expected to buy fuel at market prices from petrol stations operated by the private sector.

He said, “The NNPC cannot continue to shoulder the responsibility of petroleum products imports alone without the support of the private sector.

“Indeed, many have argued that fuel subsidies come with negative consequences for the economy including encouraging wasteful energy consumption, creating fiscal burdens on government budgets, increasing health and environmental costs of fossil fuels as well as helping to promote inequality.

“In fact, studies have shown that the richest 20 per cent of households in low and middle-income countries use six times more subsidised fuel than the poorest 20 per cent.

“But then, it is equally a fact that the removal of subsidy would have catastrophic consequences for the poorer strata of the society.”

He added, “Therefore, the right balance that guarantees minimal distortion to the economy is for Nigeria to domesticate a model which has been used with some degree of success in some oil producing countries in Africa notably Egypt and Libya.

“It is the fuel smartcard initiative whereby interested owners of commercial vehicles, including official vehicles owned by educational institutions, hospitals, religious bodies and government agencies would be required to register and obtain the card for purchasing fuel at regulated prices from the NNPC petrol stations.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Egypt Leads Nigeria, South Africa in Foreign Direct Investment

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Egypt Leads Nigeria, South Africa in Foreign Direct Investment

The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.

South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.

The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.

However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.

The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.

UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.

The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.

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Economy

FG to Partly Fund Six Rail Projects Connecting All Regions

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FG to Partly Fund Six Rail Projects Connecting All Regions

The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.

In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.

We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

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Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

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FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

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