‘No Magic’ Can Cut Transport Fare By October – Economist Counters Tinubu, NGF

An economist, Dr Marcel Okeke, has questioned the Federal Government’s promise that Nigerians will begin to enjoy cheaper transportation from October 1, saying there is no ‘magic’ that can make the directive happen without additional funding.

Okeke said the directive by President Bola Tinubu to state governors looked more like a political statement, especially with the 2027 elections already drawing closer.

He spoke in reaction to Tinubu’s announcement that the Federal Government and state governments had agreed on measures aimed at reducing transportation costs through the use of Compressed Natural Gas (CNG) and electric vehicles.

“I don’t know what magic they’re going to perform, but you know that the presidential election campaign has started,” Okeke said in an interview with Daily Trust.

The economist argued that although state governors are now receiving more money from the Federation Account, the increase does not necessarily mean that they have more purchasing power.

He explained that the sharp fall in the value of the naira had eroded much of the benefit of the higher allocations being received by the states.

Okeke gave the rising price of cement as an example.

According to him, a 50kg bag of cement sold for between ₦3,000 and ₦4,000 in May 2023, when a state receiving ₦1 billion could buy a significant quantity.

Today, he said, cement sells for about ₦12,000 to ₦15,000 per bag, meaning that even if the same state now receives ₦10 billion, the real value of the money is not necessarily better.

“So if that state government is now getting N10 billion instead of N1 billion, is that better, is that government better off or worse off? Because with the N10 billion now, it cannot buy the quantity of cement that it used to buy when it was getting ₦1 billion,” he said.

Okeke said governors would find it difficult to introduce new transport programmes that were not included in their 2026 budgets, particularly given the financial demands already facing many states.

He argued that if the President genuinely wants the programme implemented before October, the Federal Government may have to provide additional funds to the states.

“I want to believe that he must have given this directive on the surface and behind the scenes. For that to happen, they must find a way to route money to those governors,” he said.

The economist also raised concerns about the management of public funds, alleging that leakages in the system had continued to affect the implementation of government projects.

He said the government would need to explain how the new measures would be funded without taking money away from existing programmes.

Tinubu Promises Cheaper Transport

Naija News reported earlier that Tinubu had announced on Thursday that state governors had agreed to take immediate steps to reduce transportation costs in their respective states.

The President said the plan would rely heavily on cheaper energy sources, particularly CNG and electric vehicles.

According to him, a joint Federal and State committee would begin work immediately, with the aim of ensuring that Nigerians start benefiting from lower transport fares from October 1.

“I am pleased with my discussion with the Governors’ Forum this afternoon. The governors have, on their own initiative, resolved to take immediate measures to bring down the cost of transportation in their states, with a strong focus on leveraging the cost benefits of CNG and electric vehicles,” Tinubu said.

He said the Federal Government had already converted more than 120,000 vehicles to CNG, while another 100,000 conversion kits were being worked on.

Tinubu also said more CNG refuelling facilities were being developed across the country.

He disclosed that the government was financing more than 100 gas projects through the Midstream and Downstream Gas Infrastructure Fund, including 15 CNG mother stations and 86 daughter stations.

The President further said another 500 CNG refuelling stations had been ordered, in addition to the 500 stations announced earlier in the year.

Tinubu said the high cost of transportation was being felt most by Nigerians within states and maintained that governors were in a position to make a direct difference.

“We have agreed to set up a joint Federal and State committee to begin implementing these measures immediately. A vehicle running on CNG spends 60 to 80 per cent less on fuel than one running on petrol.

“From October 1, our goal is that Nigerians begin to partake in those savings through lower transport fares. We have agreed that cheaper fuel should result in cheaper fares,” he said.

Governors Back CNG Programme

The Nigeria Governors’ Forum also backed the proposed National Affordable CNG Transit Programme, saying the initiative could help bring down transport fares.

The governors met in Abuja and agreed to consider supporting CNG vehicle conversions, fleets and other infrastructure needed to make the programme work.

Bayelsa State Governor, Douye Diri, who read the communiqué issued after the meeting, said rising transport costs had contributed significantly to the hardship being experienced by Nigerians.

He said the governors were prepared to work with private investors to increase the number of CNG vehicles on the roads.

“Gas is cheaper than petrol, which will actually reduce the costs of transportation,” Diri said.

He added that cheaper transportation could have a wider impact on other sectors of the economy.

Atiku: Tinubu Acting Out Of Panic

The President’s announcement came amid the ongoing argument between the Presidency and former Vice President Atiku Abubakar over petrol subsidy.

Atiku, the presidential candidate of the African Democratic Congress (ADC), has promised to introduce a new subsidy arrangement if elected in 2027.

He said his proposal would focus on subsidising crude supplied to local refineries rather than returning to the old system.

“My proposal is not to resurrect the old subsidy regime. We will move the subsidy from importation to production, from middlemen to Nigerian refineries, and from unverifiable claims to verifiable barrels. The principle is simple: the subsidy will follow the barrel,” Atiku had said.

The former Vice President has argued that Nigerians have not felt the benefit of the savings from subsidy removal, pointing to the rising cost of food and transportation.

Reacting to Tinubu’s latest announcement, Atiku’s aide, Phrank Shaibu, accused the President of responding to pressure generated by Atiku’s argument.

He described the announcement as “panic dressed in presidential grammar.”

Shaibu said the government had spent more than three years asking Nigerians to endure the effects of its economic reforms, only to now promise cheaper transportation.

He argued that reducing the cost of fuel would naturally affect transportation and food prices.

“Atiku’s point has always been simple: you do not fight poverty by making the basic energy that moves food, workers and commerce unaffordable,” Shaibu said.

He, however, acknowledged that CNG could help reduce costs but argued that the government must do more to make the fuel readily available.

While the Federal Government continues to promote CNG as a cheaper alternative to petrol, motorists in Abuja and other parts of the country have complained about the shortage of refuelling stations.

According to a Daily Trust report, some motorists spend several hours in queues at the few available CNG stations, while others have complained about inconsistent supply.

A member of the Amalgamated Union of App-Based Transporters of Nigeria, Chiwendo Ogbonna, said the situation had become frustrating for drivers.

“As you can see, cars queue from morning till night. Before you are able to get gas, you have to queue for the whole day,” he said.

Ogbonna said more motorists were converting their vehicles to CNG, but the available infrastructure was not growing at the same pace.

“Every day, more than 100 vehicles are converting from fuel to CNG. But conversion is not where the matter ends. It is about getting the gas,” he added.

Another motorist, Chuka Ajibo, called for more investment in CNG stations, saying the shortage was contributing to the long queues.

A CNG user, Chibuzor Evrunobi, also complained about irregular supply.

“CNG is not always available. Even when it is available, the cars are more than the stations,” he said.

The Federal Government introduced the CNG initiative in 2023 following the removal of petrol subsidy.

The programme was presented as a cheaper and cleaner alternative to petrol, particularly for commercial transport operators, with the government hoping that lower fuel costs would eventually translate into lower fares for commuters.

The Presidential Initiative on CNG and Electric Vehicles says more than 120,000 vehicles have so far been converted.

The government has also continued to expand CNG conversion centres and refuelling infrastructure across the country.