Transportation costs may begin to ease from October 1 if a new Federal Government plan to cut the cost of running commercial vehicles translates into lower fares for commuters.
President Bola Ahmed Tinubu has announced plans to reduce intra-state transportation costs by accelerating the adoption of Compressed Natural Gas (CNG) and electric vehicles, while working with state governments to ensure that savings from cheaper fuels are passed on to passengers.
The plan comes at a time when high transport fares have become one of the most visible consequences of the removal of petrol subsidy, with commuters spending significantly more to get to work, schools, markets and other destinations.
Tinubu unveiled the plan after meeting with state governors at the Presidential Villa in Abuja, where he said the Federal Government and the states had agreed to take immediate steps to bring down the cost of intra-state transportation.
The removal of petrol subsidy in May 2023 triggered a sharp increase in the price of petrol and, consequently, the cost of operating vehicles.
Transport operators have had to contend with higher fuel, maintenance and spare-parts costs, while commuters have borne much of the burden through increased fares.
The issue has also become a major political talking point ahead of the 2027 elections.
Former Vice-President Atiku Abubakar has proposed a redesigned petrol subsidy regime, arguing that government should consider measures that would cushion the impact of high fuel prices on Nigerians.
The Tinubu administration, however, appears determined to maintain the subsidy-free model while seeking to reduce transport costs through cheaper alternative fuels.
At the heart of the government’s strategy is the Presidential Compressed Natural Gas Initiative, which is designed to move a growing number of vehicles away from petrol to CNG.
According to Tinubu, more than 120,000 vehicles have already been converted to CNG nationwide. The government is also working on another 100,000 conversion kits, which it hopes will enable more commercial and private vehicles to switch to the cheaper fuel.
The economic case for the programme rests largely on the difference in fuel costs.
Tinubu said vehicles powered by CNG could achieve fuel savings of between 60 and 80 per cent compared with petrol-powered vehicles.
The administration now wants a significant portion of those savings to reach commuters through lower transport fares.
A major challenge, however, has been ensuring that motorists have easy access to CNG.
To address this, the government is expanding the country’s CNG infrastructure.
Tinubu said more than 100 gas projects were being financed nationwide through the Midstream and Downstream Gas Infrastructure Fund.
The projects include 15 CNG mother stations and 86 daughter stations, while four projects commissioned in May are already operating in Lagos, Abuja and Owerri.
The President also disclosed that he had directed the rollout of another 500 CNG refuelling stations, in addition to the 500 stations earlier ordered.
This would bring the government’s planned CNG refuelling network to 1,000 stations nationwide.
The expansion is expected to make CNG more accessible and reduce one of the major obstacles to mass conversion.
The government’s central argument is simple: if transport operators spend less on fuel, commuters should also pay less.
But achieving that will require more than converting vehicles.
Tinubu said the Federal and state governments had agreed to establish a joint committee to immediately implement measures aimed at reducing transportation costs.
The committee will focus particularly on intra-state transportation, where state governments have significant influence over transport operations and regulation.
“From October 1, our goal is that Nigerians begin to partake in those savings through lower transport fares,” Tinubu said.
He summed up the policy with the principle that “cheaper fuel should result in cheaper fares.”
The biggest question surrounding the plan is whether lower operating costs will automatically translate into lower fares.
Transport fares are influenced by several factors beyond fuel prices, including vehicle maintenance, spare parts, road conditions, vehicle financing, taxes and levies, as well as operators’ profit margins.
For the government’s October target to succeed, therefore, mechanisms will have to be put in place to ensure that savings from CNG adoption are not absorbed entirely by operators.
The availability and affordability of conversion kits will also be critical. So will the speed at which CNG stations are built and become operational.
For the Federal Government, the October 1 deadline is intended to demonstrate that the transition from petrol to cheaper alternative fuels can produce tangible benefits for ordinary Nigerians.
But for commuters, the measure will ultimately be judged by a much simpler question: How much will it cost to get on a bus, taxi or tricycle from October 1?
Workers, students, traders and other Nigerians who spend a significant portion of their income on daily transportation are unlikely to be impressed by the number of vehicles converted or CNG stations commissioned if fares remain unchanged.
Transportation costs also have a wider impact on the economy. When commuting becomes more expensive, workers spend more to get to their jobs, traders incur higher costs moving goods and businesses often pass increased logistics expenses on to consumers.
That makes the success of the government’s plan important beyond the transport sector.
The Tinubu administration is betting that cheaper fuel, wider CNG availability and cooperation with state governments can deliver sustainable reductions in transport fares without returning to the old petrol subsidy system.
The real test, however, begins on October 1.
If the savings promised by the CNG programme begin to show up in lower fares, the policy could provide some relief to millions of Nigerians still grappling with the high cost of living.
If fares remain largely unchanged despite lower fuel costs, the government will face questions over how effectively the benefits of its energy transition are reaching the people.
For commuters, the verdict will not be based on policy announcements or infrastructure figures. It will be determined at the bus stop, taxi stand and motor park — by the fare they are asked to pay.
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