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

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  • 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.”

About the Author

Samed Olukoya
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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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