Based on previous trends of rising prices during the Yuletide season, it can be foreseen that transport fares will escalate by as much as 30-40% if not more by December 2020 and this could disrupt the plans of many Nigerians to travel during this upcoming Christmas season.
In an exclusive interview with Obinna Anyaegbu, the Managing Director of Chisco Motors, it was noted that currently, bus prices are already at an average of N12,000 from Lagos to Abuja, and N8,000-N9,000 from Lagos to places in the Eastern region.
This was against N8,000 and N6,000 respectively in 2019, representing a 50 percent increase in both scenarios.
Similarly, in an earlier report, BusinessDay Sunday analysis showed that the Young Shall Grow, GUO and Libra Motors were charging as high as N9,500 to N12,000 by the third week of December 2019 for journeys that cost between N4,500 to N6,500 before the yuletide season.
These price speculations were excluding the fact that booking online and booking days ahead of one’s journey has its perks such as discounts, among other benefits.
Moreover, the adverse impact of COVID-19 on the transportation sector has not gone unnoticed.
Anyaegbu proceeded to mention that the resulting COVID-induced currency devaluation and dollar scarcity greatly contributed to higher purchase rates of vehicles, spare parts among others which are usually imported.
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“Specifically, dollars are being bought at about N470/N480. And coupled with necessary social distancing measures, COVID made it much more apparent that prices had to be increased to make up for the empty seats”, said Anyaegbu.
“Realistically, passenger level has depleted by about 30-40% because people are not moving as much compared to last year due to reduced transportation activities by businessmen and petty traders, mainly stemming from lower economic activities” Anyaegbu added.
For instance, because most businesses are not booming as usual, businessmen are no longer accompanying the movement of their products as they are resorting to using waybills and other alternatives, all in a bid to minimise cost on their end. Another thing is that market days and frequency of business operations has been restricted to lesser times, say thrice in a week as companies are not really operating at full capacity, especially during the peak of the eased lockdown phase”, said Anyaegbu.
Then, there is also the issue of persistently rising inflation which is further depleting purchasing power and living standards while increasing the costs of people’s livelihood.
However, it was disclosed that even without the coronavirus pandemic, the month of December has always been a trying period for people in the transport industry.
“Every year, during the December period, prices increase, not just to festivities but mainly because of one-way traffic as against other months where traffic is both ways for the drivers. For instance, in December, literally everyone is travelling from Lagos to other places such as Eastern, Northern and Southern Nigeria and not vice-versa. So, because there will hardly be persons travelling to Lagos during the festive season, most drivers have to move their vehicles without passengers upon returning to their base”, Anyaegbu said.
Anyaegbu proceeded to state that “the same trend applies to January where most individuals are returning for work purposes and leaving their homes to journey towards Lagos or wherever their workplaces are situated. For these kinds of scenarios, it will also be difficult to get passengers who are returning towards their home towns”.
“Ordinarily, prices should be doubled to make up for this vacuum but we never really get to double the price till around the 29th of December or thereabout although from around the 12th or 13th December, prices start rising by 10-30% to make up for the increasing cost of operations”, said Anyaegbu.
Also, the federal government on Friday, November 13 2020 effected the announcement of the increased pump price of petrol to N155.17 per litre, up from N147.67. However, marketers would be selling at a far higher price of N168/Litre and possibly marginally higher, going by previous adjustments where the marketers are allowed to sell at a greater margin after taking into consideration several in-built costs.
For instance, when the ex-depot price was N147.67, marketers sold at prices between N154 and N161 per litre. In the same vein, the National Operation Controller of the Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi stated that “We are expecting the pump price to range from N168-N170 per litre”.
This fuel price hike has serious ravaging implications for Nigerians by driving up fuel scarcity due to hoarding petrol for selfish interests as people seek to purchase fuel at lower prices. Such self-imposed fuel scarcity is likely to simultaneously further drive-up transport costs, and ultimately, possibly hinder the travel plans of many Nigerians.
Anyaegbu also commented that he recently bought petrol at N166/Litre and this hike in price is already having impact on transportation by further escalating operational costs which has to be passed down to customers in the form of higher prices.
“As a result, we are already seeking other options such as gas and hyper electric mediums to substitute for fuel. This switch to alternative energy sources involves conversion process of the existing buses from fuel to be gas or hyper electric based, as well as changing our importation orders on new fleet of vehicles to be gas and hyper electric recipient”, stated Anyaegbu
When asked of the cost implications, Anyaegbu noted that cost benefit analysis was key as such kind of investment is supposed to pay off eventually, especially when considering sustainable alternatives and the fact that they do not want to lose customers due to high levels of competitiveness in the transport industry.
At the moment, the transport sector is definitely hurting because not all costs can be passed down to clients.
In responding to concerns of the possibility that these rather tragic events might dissuade travellers from journeying home for the festive season, Anyaegbu commented that “willingness to travel has been affected already because many people’s business plans did not happen this year as no one foresaw this level of disruption in business and economic activities”.
“People will still move but not at the level of last year as those who must travel have no other choice but to embark on their journey. However, the socioeconomic situation in the country has greatly affected the employment and income levels of many Nigerians due to layoffs and salary cutbacks and this will definitely limit people’s ability to pay the transport fares and travel home for Christmas compared to previous years”, said Anyaegbu.
