As a result of fuel subsidy removal, private car owners in Africa’s largest economy are now charging for transport rides as a means to offset rising fuel costs.
Akinolu Akinola, an IT officer who works at Ikeja and lives at Egbeda now charges his neighbors for transporting them to work to and fro, a development that only occurred post petrol subsidy removal.
“Prior to the fuel subsidy removal, I used to transport four of my neighbors without charging them,” Akinola explained. “However, since the price increased, I now charge N700 per person for each trip.”
This change was necessitated by the increase in Akinola’s weekly fuel expenses. He revealed that his fuel costs nearly doubled from N20,000 to almost N40,000, prompting him to charge his neighbors N1,400 for round trips that would cost them N2,000. By doing so, he can generate N28,000 weekly, covering over half of his fuel budget.
He said that the development was a result of the significant change in the amount of fuel he purchased weekly.
“I went from buying N20,000 fuel per week to buying almost N40,000 weekly, to not carry the weight of this alone I charged my neighbors 1400 to and fro for a trip that will cost them N2000. By doing this I make N28,000 weekly covering more than half my fuel budget,” he said.
Fuel prices across the country have increased significantly, rising by an average of 174.6 percent due to recent changes. This has made it even more challenging for consumers as the removal of fuel subsidies and currency depreciation have caused prices of goods and services to go up further.
Nigerians have been badly impacted by the country’s accelerating inflation and Nigeria’s inflation at 22.41 percent in May is far outpacing wage growth, according to data from the National Bureau of Statistics.
The data showed that fuel and transport were the second and fourth factors contributing to inflation growth respectively.
“Food & non-alcoholic beverages contributed most to the acceleration in the headline inflation with (11.61 percent) followed by housing water, electricity gas & other fuel (3.75 percent), clothing & footwear (1.71 percent) and transport (1.46 percent),” the report said.
With the current pump price, it will cost a minimum wage earner of N30,000 two-thirds of his income to purchase 40 liters of fuel.
Another trader at CMS, Chigozie Ejikem, a dealer in women’s wares in a store along CMS utilises his Sienna vehicle to transport people to and from work.
“I have an eight-seater passenger vehicle, in the morning I carry people from Orile to CMS for N300 and charge N500 in the evening, and on days where I’m lucky I get chartered to carry goods to my route and get paid more,” he said.
Ejikem said that if it wasn’t for the money he earns from transporting people, he would have stopped using his car for commuting to work.
While already prevalent in several developed countries, carpooling is slowly gaining momentum in Nigeria.
One of the primary concerns surrounding carpooling among Nigerians is safety, leading to the emergence of various carpooling apps such as Mobiride, Driveinhud, and Jekalo.
Carpooling, also known as car-sharing, ride-sharing, and lift-sharing, is the practice of sharing car journeys to reduce the need for individual trips. It offers cost savings for car owners and provides a convenient alternative to public transport for commuters.
These apps facilitate the creation of trips by car owners in their preferred direction, allowing others to join and share the costs. Furthermore, they connect non-car owners who are located in the same area and heading towards similar destinations, enabling them to book a taxi together.
The cost of moving within the cities on commercial transportation across the country has doubled following the adjustment of the pump price of a liter of fuel from an average of N191 per liter to N526.7 per liter owing to subsidy removal.
Morakinyo Lanre spoke of the different means Nigerians are trying to cope with increased fuel prices, “Nigerian adults are now lapping themselves inside public transport over a hike in transport fare.”
Since the hike in price, several Nigerians have sought ways to cut costs, especially transportation costs, employees’ requests for remote work are surging, and several others carpool with their colleagues.
