Transport Fares Jump By 283% Amid Rising Fuel Subsidy – NBS Report | AfroNaija



 
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Transport fares jump by 283% amid rising fuel subsidy – NBS report

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Transport fares jump by 283% amid rising fuel subsidy – NBS report

Transport fares jump by 283% amid rising fuel subsidy – NBS report

Intra-city transport fares in Nigeria have increased by 283% on average, owing to the rising cost of fuel subsidies to the Federal Government, according to a report by the National Bureau of Statistics.

According to reports, the average cost of bus transportation within Nigerian cities has risen from N122.83 in January 2017 to N470.83 in December 2021.

This means that the cost of intra-city bus transportation has increased by 283%, or N384, in four years.

This is according to an analysis of data from the National Bureau of Statistics’ Transport Fare Watch reports.

In 2017, Abuja had the highest intra-city bus transport cost at N290.55 while Borno had the lowest at N50.

In 2021, Zamfara had the highest intra-city bus transport cost at N700.22 while Abia had the lowest at N294.44.

The data shows that the lowest cost in 2021 is 2.4 times higher than the average cost in 2017.

The report also shows that the average cost of bus transportation from one city to another rose from N1,430.63 in January 2017 to N2,784.92 in December 2021.

However, despite the massive increase in the cost of bus transportation, the average price of petrol increased by only 11.48 per cent within the period under review.

The average price paid by consumers for premium motor spirit 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 increasing.

In 2017, the Nigerian National Petroleum Corporation said that it spent N144.53bn in subsidising premium motor spirit.

A breakdown of the amount spent on subsidising petrol on a monthly basis in 2017 showed that in January, February, March, April, May and June, N37.26bn, N6.3bn, N8.207bn, N8.207bn, N7.743bn and N11.79bn were spent by the NNPC respectively; while for the months of July to December, the NNPC spent N10.25bn, N7.939bn, N7.522bn, N6.849bn, N16.785bn and N15.677bn, respectively.

In 2021, the NNPC said fuel subsidy gulped N1.43tn, although there was no record for under-recovery in January.

In February, March, April, May, and June 2021, under-recovery for PMS amounted to N25.37bn, N60.39bn, N61.96bn, N126.29bn, and N164.33bn respectively.

In July, August, September, October, November and December, the NNPC spent N103.28bn, N173.13bn, N149.28bn, N163bn, N131.4bn, and N270.83bn, respectively.

Within the four-year period under review, the cost of fuel subsidy rose by 889.41 per cent.

Economic and energy experts continued to decry the rising cost of fuel subsidy to the Federal Government.

The World Bank and the International Monetary Fund have decried the Federal Government’s huge spending on petrol subsidy, urging the government to end the regime.

Although the Federal Government had planned to stop subsidising fuel subsidy by June 2022, government last week backtracked on the plan.

The government subsequently said the proposed removal of fuel subsidy would be extended by 18 months. It also said the development meant the Petroleum Industry Act would be reviewed and sent to the National Assembly.

Several groups described the decision of the All Progressives Congress-led government to suspend the petrol subsidy removal as an election strategy.

Meanwhile, the NNPC has requested a total of N3tn from the government to fund fuel subsidy in 2022.

The President’s Special Adviser on Media and Publicity, Femi Adesina, had recently said Nigeria will have to pay a price for the government’s decision to retain the fuel subsidy regime, noting that the country may have to continue borrowing to meet its obligations.

Justifying the government’s decision to retain fuel subsidy, Adesina said, “It is done because as the Minister (of Finance) stated, the timing is not auspicious, inflation is still high. In the past eight months, we saw inflation reducing but the last month, it went up again; further consultations need to happen with all the stakeholders… the timing is not right, it will exacerbate the hardship of the people and the President genuinely cares.”

He added, “This fuel subsidy, whether it stays or goes, is going to have a serious impact on the economy.”

On the financial cost of the 18-month extension for subsidy removal, Adesina had said, “Head or tail, Nigeria will have to pay a price; it is either we pay the price for the removal in consonance and in conjunction with the understanding of the people. The other cost is that borrowings may continue and things may be difficult fiscally for both the state and the Federal Government. You know how much could have been saved if the subsidy was removed and how it could have been diverted to other spheres of our lives…we have to pay a price.”

It had been reported that the Buhari administration plans to push its public debt stock to N50.22tn by 2023, with domestic debt at N28.75tn and external debt at N21.47tn, according to the projections in the National Development Plan 2021-2025.

Also, the Central Bank of Nigeria recently said transportation cost was the major cause of the surge in food inflation in the country.

The Governor of the CBN, Godwin Emefiele, said this last week after the first Monetary Policy Committee meeting of the year.

Data from the NBS showed that after eight months of decline, Nigeria’s headline inflation rate rose to 15.36 per cent in December 2021, from 15.50 per cent recorded in November.

This increase threatens the key projections and assumptions for the 2022 budget, as the Federal Government projects an inflation rate of 13 per cent.

Also, the World Bank had earlier disclosed that Nigeria might have one of the highest inflation rates globally in 2022, with increasing prices diminishing the welfare of Nigerian households.

Economists have continued to warn the government about the implications of the rising cost of fuel subsidy, which according to them benefits the rich more than the poor.

They also said it would continue to adversely affect the government’s revenue.

An economist and a senior lecturer of Economics at the Pan Atlantic University, Dr Olalekan Aworinde, had 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.”

According to him, Nigerians do not trust their government on the proper management of the money saved from fuel subsidy.

The post Transport fares jump by 283% amid rising fuel subsidy – NBS report appeared first on NEWS.

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Aminat Aigbe

Aminat Aigbe is the first lady of afronaija and a very good blogger ( Original Mrs AfroNaija )

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