Trends in Transport Fares Across Nigeria

This article examines the trends and price fluctuations of various modes of transportation in Nigeria, from January to October 2023. We analyze data on Water Transport, Airfare Transport, Bus Journey Intercity, and Journeys by Motorcycle, comparing their prices to the average PMS price.

WATERWAY TRANSPORT PRICE

Water Transport is vital for many people and businesses in Nigeria. It provides a fast and convenient way to travel across the waterways and avoid traffic congestion on the roads. However, the price of Water Transport can vary depending on the demand, supply, and other factors. As it can be observed from Figure 1 below, the average price of Water Transport for each month from January to October 2023, in Nigerian Naira (NGN).

As seen, the price of Water Transport was relatively stable from January to May, ranging from N1,029.47 to N1,051.12. However, from June onwards, the price increased significantly, reaching a peak of N1,406.84 in September. This was a 36.66% increase from the lowest price in February. This sudden surge could be due to the rainy season, which increased the water level and the demand for Water Transport, as well as the reduced supply of boats and ferries due to maintenance and safety issues.

In October, the price of Water Transport decreased slightly, from N1,406.84 to N1,395.68. This was a 0.79% decrease from the previous month and a 35.51% increase from the lowest price in February. This slight decrease could be due to the end of the rainy season, which reduced the water level and the demand for Water Transport, as well as the increased supply of boats and ferries due to the completion of maintenance and safety checks.

However, the price of Water Transport in October was still very high compared to the previous months, and it was unclear if this was a temporary dip or the beginning of a downward trend. The factors that could affect the future price of Water Transport include the weather conditions, the availability of boats and ferries, the fuel costs, the government regulations, and the competition from other modes of transport.

Focus on Airfare
Air travel is one of the most convenient and popular modes of transportation in the world. However, the price of air tickets can vary significantly depending on various factors such as demand, supply, seasonality, fuel costs, taxes, and fees.

From Figure 2, it can be observed that the Airfares have increased steadily from January to May, with a slight dip in February. The price then jumped significantly in June, reaching a peak in September. The price dropped slightly in October but remained higher than the previous months.

We can see that the percentage change was mostly positive from January to May, indicating a rising trend. The percentage change was negative in February, which was the only month that had a lower price than the previous month. The percentage change was very high in June, reaching 4.93%, which was the highest among all the months. The percentage change was also high in July and August, but slightly lower than in June.

The average Airfare Transport Price for October 2023 was N78,778.38, which was 0.30% lower than September 2023, which had the highest average price of N79,013.48. The October price was also 5.63% higher than February 2023, with the lowest average price of N74,571.62.

Possible reasons for the trend can be:

• The supply of air travel was also lower in October than in September, due to the reduced flight frequency and capacity of some airlines, as well as the maintenance and repair of some airports.
• The fuel costs were higher in October than in September, due to the increase in the global oil prices and the depreciation of the Naira against the US dollar.
• The taxes and fees were also higher in October than in September, due to the implementation of the new Value Added Tax (VAT) rate of 7.5% on air tickets, which was effective from October 1, 2023.

Bus Fares for Intercity Journeys

Bus journey intercity is a mode of transportation that uses buses to carry passengers between different cities or states in Nigeria. It is one of the most convenient and economical modes of transportation in Nigeria, especially for long-distance trips. Some of the advantages of bus journey intercity are that it is comfortable, safe, and reliable, and it can also offer scenic views and social interactions.

According to the NBS, the average fare for a bus journey intercity in Nigeria is represented in Figure 3. The fares increased by 48.1% from January to September 2023. The average fare in January was N3,998, while the average fare in September was N5,917. The highest increase was recorded in June when the average fare rose by 42.1% from N4,002 in May to N5,686 in June. The lowest increase was recorded in May when the average fare increased by 0.2% from N3,995 in April to N4,002 in May.

In October, the price of bus journeys intercity and PMS decreased from their previous levels, but the price of bus journeys within the city decreased more than the average of PMS price. The price of bus journeys within the city dropped by 16.5% from N1,337.80 in September to N1,117.30 in October.

The average PMS price decreased by 0.1% from N626.21 in September to N630.63 in October. The decrease in both variables may be due to the easing of the fuel scarcity crisis that affected the country in June and July. However, the price of bus journeys within the city remained higher than the average PMS price, indicating that other factors such as demand and supply, inflation, and regulation also affected the bus transportation sector.

Motorcycle (Okada) Fares 

Journey by motorcycle, or okada, is one of the most popular modes of transportation in Nigeria for short-distance trips. Motorcycles are fast, cheap, and convenient, and can navigate through traffic jams and rough terrains. 

Figure 4 reveals a general upward trend in both motorcycle travel costs and PMS prices. This can be attributed to various factors, including global inflation, supply chain disruptions, and fluctuations in crude oil prices.

From January to May; Motorcycle travel costs remained relatively stable, fluctuating between N461.28 and N464.55. PMS prices exhibited a similar pattern, ranging from 238.11 to 263.72.

June to August shows that both motorcycle travel and PMS prices experienced a significant increase. Motorcycle travel costs jumped to 618.52 in June, while PMS prices peaked at 626.70 in August. This surge can be attributed to factors like increased demand during summer months and potential disruptions in fuel supply.

From September to October, Motorcycle travel costs witnessed a slight decline in September N646.29 but remained relatively high in October N507.30. PMS prices, however, continued to rise slightly in September (626.21) before dropping significantly in October N630.63.

While the overall trend suggests a parallel increase in both motorcycle travel and PMS prices, October presents an interesting anomaly. Despite a decrease in PMS prices, motorcycle travel costs remained relatively high. This could be due to several reasons:

• Seasonal factors: October marks the end of the rainy season in Nigeria, potentially leading to an increase in travel demand and associated costs.
• Local market dynamics: The cost of motorcycle spare parts and maintenance might have increased independently of PMS prices.
• Supply and demand: The availability of motorcycles might have been limited, driving up prices despite lower fuel costs

October reveals a similar pattern to motorcycle travel, where bus fares remained elevated despite a slight decrease in PMS prices. This raises the question: why are bus fares not declining proportionally with fuel prices?

Several factors could contribute to this disparity:

• Operating costs: The cost of maintaining and operating buses includes factors beyond fuel, such as spare parts, labor, and insurance. These costs might have increased independently of PMS prices.
• Market competition: Bus companies might be hesitant to reduce fares drastically to maintain their competitive edge in the market.
• Consumer expectations: Passengers might have adjusted their expectations to higher fares due to the prolonged period of increased costs, making it difficult for bus companies to lower fares without impacting their revenue.

In summary, our analysis reveals several key findings:

• Water Transport: Prices initially remained stable but saw a significant surge from June to September due to factors like increased demand during the rainy season and limited supply. October witnessed a slight decrease, but the overall price remained higher than in earlier months.
• Airfare Transport: Prices steadily increased from January to May, then jumped significantly in June, peaking in September before dropping slightly in October. The fluctuations were attributed to factors like seasonality, fuel costs, and taxes.
• Bus Journey Intercity: Fares exhibited a consistent upward trend, significantly increasing from January to September. October saw a slight decrease, but prices remained elevated compared to the beginning of the year.
• Journey by Motorcycle: Costs showcased a similar pattern to bus fares, increasing steadily throughout the period with a slight dip in October. While PMS prices also increased, the decrease in October did not translate proportionally to motorcycle fares.

These findings highlight the complex dynamics influencing transportation prices in Nigeria. Factors like fuel costs, seasonality, and demand play a significant role, and their impact can vary across different modes of transport.