The recent removal of fuel subsidies in May 2023 has led to an average fuel price increase of about 250%.
Despite this increase, the cost of transportation for bus journeys within cities has seen both a month-on-month and year-on-year decrease. This implies that in August 2024, transportation prices for bus journeys within cities were significantly cheaper than they were in August 2023.
The year-on-year growth rate, in this case, compares one challenging period to another. Right after the removal of subsidies, there was a surge in transportation costs as well as commodity prices.
The year-on-year change is usually used to measure long-term trends, while month-on-month changes reflect short-term impacts of economic indicators or shifts in parameters.
Nigerians typically engage in more intracity journeys than intercity journeys, live and work within the same city, requiring daily commutes for work, school, and other routine activities. Intercity journeys are more occasional, often reserved for holidays, business trips, or visits to rural areas and smaller towns.
This decrease might be a result of Nigerians being forced to adopt new coping strategies to manage the rising cost of transportation, with more citizens turning to alternatives such as carpooling, use of staff buses or prioritizing essential trips.
Data from the National Bureau of Statistics (NBS) shows that public transport fares for intra-city journeys declined by 7.77% in August 2024 alone. This decrease has been recorded for three consecutive months for bus journeys within cities.
The year-on-year and month-on-month negative change in the cost of bus journeys, despite rising fuel prices, may suggest that there is parallel market competition influencing prices due to lower demand.
This implies that Nigerians are prioritizing their most essential movements first, and carpooling has increased. Consequently, the low demand for this mode of transportation has forced operators to reduce prices.