Subsidy removal: Transportation fare rises as increase in fuel pump price bite

May 13, 2023

The cost of moving within the city on commercial transportation has skyrocketed in the past week following the adjustment in the pump price of fuel from N185/litre to between N488/litre and N511/litre due to the Federal Government's plan to remove the controversial fuel subsidy.

BusinessDay findings show that the cost of transport increased by 100 percent in most cases and 50 percent in a few cases depending on the distance.

In Lagos for example, a journey of N100 has doubled to N200; that of N200 or N300 has been raised to N500 while that of N500 has been pegged at N800 or N1,000 in some cases.

To transporters, the rise in transportation fares is to meet the current realities in Nigeria even though, they claimed the increment does not cover their cost.

Commercial drivers said the adjustment in the pump price of fuel has started taking a toll on their transportation business because it takes a lot of money to fuel the vehicle in today's Nigeria.

They said that fueling one's vehicle has become a luxury as one now requires tens of thousands of naira to fill the tank of the vehicle.

Ola Rasheed, a commercial bus driver in Lagos, told BusinessDay the story of how he bought 61 litres of fuel for over N30, 000 yet the fuel did not fill the tank of his ‘danfo’ bus as it is popularly called.

Rasheed said though the Road Transport Union has gone ahead to increase the fare paid by passengers per trip, such a response does not mean that commercial drivers are breaking even.

Read also: Firm unveils new transportation scheme to ease mobility in Lagos

He said that prior to the adjustment in pump price in response to the fuel subsidy removal by the Federal Government, he can use less than N15,000 to fuel the tank of his vehicle but today, N30,000 is not even able to fill the tank of his bus.

"The trip that we used to charge between N200 and N300 per passenger, has been increased to about N500 per trip. Some of us added only N100 while others increased the transportation fare by N200 depending on the time of the day," he explained.

Rafael Godspower, another commercial driver in Lagos, said he used to buy fuel of not more than N4,000 on a daily basis to do his transport business.

Godspower, who said that he is currently making daily instalments of N10,000 known as ‘hire purchase’, he used to buy his Korope, said that he does not know how he will be able to be buying at least N10,000 fuel in a day.

He said he will in addition to the N10,000 needed for fueling the Korope, need to raise another N10,000 to meet up with the payment, get extra for his family and save up for emergencies like buying spare parts and maintaining the vehicle.

According to him, the situation will not only push many out of business but will also put a lot of commercial drivers under serious financial pressure.

Aside from the commercial bus drivers known as ‘danfo and Korope’, the drivers of ride-hailing services like Uber, Rida, InDriver, and LagRide are also not left in the lamentation as most of them had increased their fares per trip to meet current realities.

According to the ride-hailing drivers, the increment in transportation fares has pushed many of them out of business as many customers now have to cancel their trips or take commercial buses due to the high increase in fares.

For instance, passengers, who used to pay between N9,000 and N10,000 from Lagos Mainland to Lagos Island are now being charged as high as between N18,000 and N25,000.

Babatunde Kazeem, an Uber driver in Lagos, told our correspondent that the business is no longer as favourable as before. He said that before the adjustment in the pump price, he used to buy fuel of between N12,000 and N13,000 to fill his car but today, N30,000 fuel will not do that.

He said moving from the Mainland to the Island will require at least 20 litres of fuel in traffic free journey which will cost the driver nothing less than N10,000 in today's Nigeria.

According to him, a driver may log into the Uber App and may end up not getting any reasonable ride in a day because people book rides and cancel when they see the high cost of the fare.

"Presently, I do not go out every day now it is not every trip that I embark on; I calculate my move and avoid traffic challenged axis because one will not buy very expensive fuel only to burn it on Lagos traffic congestion," Kazeem said.