More than three years after President Bola Tinubu declared that fuel subsidy was gone, the impact of deregulated petrol prices continues to be felt by commuters, transport operators and small business owners.
The debate over whether Nigeria should restore fuel subsidy has intensified, with the Federal Government insisting that petrol prices can no longer be fixed, while opposition voices argue that Nigerians need urgent relief from rising transport and living costs.
The latest increase in petrol prices is taking a toll on commercial transport in Kano.
A survey across parts of Kano found that transport fares on both interstate and local routes have increased, while small business owners are also adjusting their prices to cope with rising fuel costs.
Abu Sadiq, a commercial tricycle rider, told DAILY POST that the challenge is not even buying fuel but finding passengers after filling up.
“We buy fuel at N1,440, at other fuel stations at N1,470, and even after that, you don’t always get passengers,” he said.
He explained that despite spending more to keep his tricycle on the road, passengers’ patronage has remained low.
According to him, this makes it harder to recover daily expenses.
The increase has also affected interstate travel.
The survey found that transport fares have gone up by about N1,000 on several routes. A trip from Kano to Bauchi now costs about N11,000, while passengers travelling from Kano to Mararaba in Abuja also pay around N11,000.
The Kaduna-Kano route now costs about N7,000, while Saminaka to Bauchi has also risen to about N7,000. Kaduna to Bauchi costs N15,000, while Maiduguri to Bauchi costs N12,000.
Bauchi to Wukari in Taraba costs N14,000, Bauchi to Jalingo costs N17,000, while Kano to Hadejia in Jigawa costs N9,000.
Small businesses feel the impact
The effect is not limited to transport operators.
In Mariri, Kano, a tomato grinding operator popularly known as Maman Ramadan said she had no choice but to increase her charges because of rising fuel costs.
She said she no longer accepts tomatoes for grinding below N150.
“People will complain that it’s just a small quantity of tomatoes, but it’s fuel we use,” she said.
“Sometimes, I even buy fuel from black market sellers, and at the end of the day, I don’t make the kind of profit I used to.”
However, the survey found that prices of some everyday cooking ingredients, including seasoning cubes, salt, flour and other basic food items, have remained largely unchanged in local shops around Mariri.
Government must protect poor households from fuel price shock – ABU professor
An Associate Professor at Ahmadu Bello University (ABU), Zaria, M. I. Aminu, has urged the Federal Government to protect poor and vulnerable households from the impact of rising petrol prices.
Aminu made the call in an exclusive interview with DAILY POST.
He explained that an increase in transportation costs generally puts upward pressure on inflation because the cost of moving people, food, raw materials and other goods also rises.
He said when fuel becomes more expensive, transport operators face higher operating costs and may increase fares. The effect, however, goes beyond passengers.
According to him, farmers, wholesalers and retailers also spend more to transport food and other goods from production areas to markets, with the additional costs eventually reflected in the prices paid by consumers.
“When fuel becomes more expensive, transport operators face higher operating costs and may increase fares. But the effect does not stop with passengers,” he said.
He noted that the situation is particularly important in Nigeria because the economy depends heavily on road transportation.
Aminu said higher fuel prices can quickly translate into higher freight costs and eventually higher consumer prices.
He stressed that there is no single percentage increase in fuel prices that will not badly affect low-income households.
According to him, the major issue is whether household incomes are rising at the same rate as the cost of living.
“For low-income households, the impact becomes particularly severe when higher fuel and transport costs reduce their ability to afford basic necessities such as food, housing and energy,” he said.
The economist explained that the real concern is the loss of purchasing power, rather than simply the amount of increase in the pump price of petrol.
“In essence, the danger point is not simply a particular fuel price. It is the point at which the increase substantially reduces the household’s real purchasing power and forces families to cut back on essential consumption,” he said.
Aminu said the impact of higher petrol prices is therefore not limited to motorists.
He stressed that transportation is connected to almost every part of the economy.
He explained that farmers need transportation to move their produce, traders need it to move goods to markets, while manufacturers also depend on transportation to move raw materials and finished products.
He said the higher cost of transportation is eventually passed through the supply chain and paid for by consumers.
Aminu recommends targeted support for vulnerable Nigerians
On measures the government can take to reduce the pressure on Nigerians, Aminu recommended targeted cash transfers and other social protection programmes for vulnerable households.
He also called for improvements in mass public transportation, as well as investment in roads, rail and logistics infrastructure to reduce the cost of moving people and goods.
“Government can provide targeted cash transfers and other social protection to vulnerable households, improve mass public transportation, and invest in roads, rail and logistics infrastructure to reduce the cost of moving goods and people,” he said.
The ABU don also urged the government to address the wider factors driving inflation, rather than focusing only on the price of petrol.
He identified high logistics costs, energy constraints, exchange-rate pressures and low productivity among the issues that need to be addressed.
According to him, the government’s response should combine immediate support for vulnerable households with measures that reduce the structural costs of doing business and moving goods across the country.
“The objective should be to protect vulnerable households while reducing the structural costs that drive prices upward,” he said.
Aminu further explained that controlling the pump price alone would not solve the wider economic problems associated with rising transportation costs.
He said the government needs to protect people who are most affected while also tackling the underlying factors that make transportation and production expensive.
“In a nutshell, fuel-price increases do not affect only motorists; they equally affect the entire economy because transportation is embedded in the production and distribution of almost everything we consume,” he said.
“The appropriate policy response, therefore, is not simply to control the pump price, but to protect vulnerable households while simultaneously reducing the underlying cost of moving people and goods.”
Subsidy debate persists
Recall that in 2023, President Bola Tinubu declared that fuel subsidy was gone during his inauguration, a decision that marked the beginning of Nigeria’s fully deregulated petrol market.
Since then, petrol prices have been determined by market forces, with the Federal Government insisting that it no longer has the power to fix pump prices.
Recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the government cannot reduce or increase the price of petrol because the downstream oil sector has been fully deregulated.
“The Bola Tinubu government doesn’t have any power to reduce or increase the price of petrol. It is completely deregulated in line with global best standards,” he said during an appearance on Channels Television’s Politics Today.
Lokpobiri also rejected claims that petrol should be much cheaper because it is refined locally at the Dangote Refinery, explaining that crude oil is sold at international market prices, making global pricing unavoidable.
The issue has remained a major talking point ahead of the 2027 general election.
African Democratic Congress (ADC) presidential candidate Atiku Abubakar has proposed replacing petrol import subsidies with a production-focused subsidy aimed at making locally refined petrol cheaper, lowering transportation costs and reducing the cost of living.
He also cited an SBM Intelligence survey which found that 67.4 per cent of respondents wanted fuel subsidy restored.
President Tinubu, however, has ruled out bringing back fuel subsidy, insisting that continued investment in Compressed Natural Gas (CNG) and electric-powered public transport offers a more sustainable way to reduce transportation costs.