Despite a significant 12.6% year-on-year drop in the retail price of Premium Motor Spirit (PMS) as of late 2025, Nigerian commuters continue to face a frustrating paradox: transport fares are refusing to budge. According to a recent investigation by Daily Trust, while the National Bureau of Statistics (NBS) confirms that petrol prices have dipped to an average of ₦1,061.35, the cost of bus, air, and “okada” travel has actually seen a monthly increase. This disconnect highlights a complex economic reality where fuel is no longer the sole driver of transportation costs in Nigeria.
The Sticky Price Syndrome in Nigeria’s Transport Sector
Economists often refer to this phenomenon as “price stickiness.” In the Nigerian context, once transport unions and independent operators raise fares due to a fuel hike, they are notoriously reluctant to lower them when costs decrease. Transporters argue that petrol is only one part of their operational overhead. They cite the skyrocketing costs of vehicle spare parts, tires, and engine oil, most of which are imported and subject to the volatility of the Naira. For many drivers, the slight relief at the fuel pump is quickly swallowed up by the doubled cost of a routine oil change or a new set of brake pads.
Operational Challenges Beyond the Pump
The Daily Trust report sheds light on several hidden factors keeping fares high:
- Bad Road Infrastructure: Deteriorating roads lead to frequent vehicle breakdowns, forcing drivers to maintain high fares to cover constant repair bills.
- Multiple Taxation and Levies: Unofficial levies and various local government task forces continue to collect heavy daily dues from commercial drivers, a cost that is invariably passed on to the passenger.
- Inflationary Pressure: With general inflation affecting the cost of food and housing, transport operators maintain high fares simply to keep up with the rising cost of living for their own families.
The Impact on Commuters and the Economy
The refusal of transport fares to follow fuel prices downward is a major blow to the government’s efforts to curb inflation. Transportation is a “derived demand”—it affects the price of everything from tomatoes in the market to the cost of a daily commute. As long as movement remains expensive, food inflation will likely remain stubborn, regardless of how much petrol prices fall at the station. For the average Nigerian spending a significant portion of their income on transit, the “fuel price drop” remains a statistical victory that hasn’t yet reached their actual wallet.
Seeking a Solution: Can Regulation Help?
Commuters are increasingly calling for the government to intervene, not just in fuel pricing, but in the regulation of transport unions. However, in a deregulated economy, enforcing fare caps is difficult. Experts suggest that the only long-term solution is the massive deployment of Compressed Natural Gas (CNG) buses and the improvement of the rail network to provide a cheaper, state-backed alternative that forces private transporters to lower their prices through competition.
Summary:
Nigeria’s transport fares remain high despite a 12.6% drop in fuel prices, as operators cite high maintenance costs, bad roads, and inflation as reasons for the stubborn pricing gap
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