Tinubu, Governors Target Lower Transport Fares Nationwide From October 1

Nigeria Targets Lower Transport Fares as CNG and EV Rollout Expands

President Bola Tinubu has announced plans by the Federal Government and state governors to reduce transportation costs nationwide from October 1, 2026, with compressed natural gas (CNG) and electric vehicles expected to play a central role in lowering the cost of public transport.

Tinubu disclosed the plan after a meeting with members of the Nigeria Governors’ Forum, saying the states had agreed to take immediate measures to reduce transportation costs, particularly by taking advantage of the lower operating costs associated with CNG and electric vehicles.

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The President said the Federal and state governments would establish a joint committee to begin implementing measures aimed at reducing public transportation costs.

Government Targets Lower Transport Costs From October

According to Tinubu, the objective is for Nigerians to begin benefiting from lower transport fares from October 1.

The President said intra-state transportation remains the area where Nigerians experience transport costs most directly and argued that state governments have significant influence over the sector.

The initiative comes as transportation costs remain elevated across the country. Data from the National Bureau of Statistics (NBS), reported by Nairametrics, showed that the average fare for intra-city bus journeys reached N1,431.25 in May 2026.

That represented a 2.43 per cent increase from N1,397.27 in April and a 38.63 per cent increase from N1,032.46 recorded in May 2025.

The figures underline the scale of the transport-cost challenge facing households and businesses, particularly in major urban centres where workers depend heavily on daily public transportation.

CNG and Electric Vehicles at the Centre of the Plan

The administration plans to use the lower operating costs of CNG-powered vehicles and electric vehicles to reduce the cost of public transportation.

Tinubu said more than 120,000 vehicles had already been converted to CNG nationwide through the Presidential CNG Initiative, while more than 100,000 additional conversion kits were in the pipeline.

The Federal Government also continues to expand CNG conversion centres and refuelling infrastructure.

According to the President, more than 100 gas projects are currently being financed through the Midstream and Downstream Gas Infrastructure Fund. These include 15 CNG mother stations and 86 daughter stations.

The government has also directed the development of an additional 500 CNG refuelling stations nationwide on top of 500 stations previously ordered, bringing the planned network to 1,000 stations.

Transport Operators Expected to Pass Savings to Commuters

The government's strategy rests on the expectation that lower fuel operating costs will translate into lower fares.

Tinubu said the Federal Government had repeatedly encouraged transport operators to pass savings from cheaper CNG to passengers.

BusinessDay reported that the President said a vehicle operating on CNG could spend between 60 per cent and 80 per cent less on fuel than a petrol-powered vehicle.

However, lower fuel expenditure alone may not automatically produce lower fares.

Transport operators also face other costs, including vehicle financing, maintenance, spare parts, insurance, road charges and other operating expenses. The effectiveness of the policy will therefore depend on how much of the reduction in fuel costs operators can pass on to passengers.

Transport Costs Continue to Pressure Households

The planned reduction comes against a backdrop of sustained increases in transportation costs.

The NBS data cited by Nairametrics showed that average inter-city bus fares reached N9,699.55 in May 2026, up 21.89 per cent from N7,957.41 a year earlier.

Motorcycle transport recorded an even sharper annual increase, with the average fare rising to N1,072.51, representing a 52.45 per cent increase from May 2025. Water transport fares also increased by 30.88 per cent year-on-year to N2,276.48.

Higher transport costs affect more than commuters. They also increase the cost of moving food, construction materials and manufactured products between production centres and markets.

Lower Transport Costs Could Support Urban Housing

For Nigeria's housing market, the proposed reduction in transport fares has implications beyond household mobility.

Transport costs form part of the total cost of living associated with a particular location. When commuting becomes expensive, households often face pressure to live closer to employment centres, even where housing costs are significantly higher.

Lower transport costs could improve the viability of residential areas located farther from major employment hubs, provided those areas have adequate roads, public services and other infrastructure.

This could support the expansion of urban housing into emerging areas and potentially reduce some of the pressure on high-demand locations where land and rental costs remain elevated.

The relationship between transport and housing is particularly important in cities such as Lagos, Abuja, Port Harcourt and other rapidly growing urban centres, where long commuting distances and congestion contribute significantly to household expenses.

Infrastructure Will Determine the Impact

The success of the transport-fare plan will depend partly on the availability of CNG infrastructure.

The Federal Government's plan to reach 1,000 CNG refuelling stations represents a significant expansion of the infrastructure required to support wider adoption.

However, the government itself has acknowledged that CNG infrastructure development has previously fallen behind some of its targets.

Nairametrics reported that the latest reduction in transport fares will depend on the availability of CNG and electric vehicles, conversion facilities, refuelling stations and adequate gas supply across the states.

For the housing and construction sectors, the wider expansion of energy and transport infrastructure could also improve the attractiveness of locations that currently face connectivity or infrastructure constraints.

Transport Policy Could Influence Property Demand

Transport accessibility remains an important factor in property demand.

Areas with reliable and affordable connections to employment centres generally become more attractive to households, businesses and investors. Conversely, high commuting costs can reduce the effective affordability of housing, even when property prices or rents appear comparatively lower.

A sustained reduction in transport costs could therefore influence residential demand patterns, particularly if it coincides with investments in roads, mass transit, electricity and other urban infrastructure.

For developers, improved transport connectivity could create opportunities in emerging housing corridors, although the scale of any impact will depend on whether the reduction in fares proves durable.

Government and States Must Coordinate Implementation

The Federal Government and states will need to coordinate closely to ensure that the proposed October 1 target translates into measurable reductions for commuters.

The joint committee announced by the government is expected to play a role in coordinating implementation and identifying measures that can reduce public transport costs.

State governments will be particularly important because intra-state transport accounts for a significant share of daily commuting, while transport regulation and operations vary across states.

The policy will also require cooperation from transport operators, who will ultimately determine how much of the savings from lower operating costs reaches passengers.

Outlook

The planned reduction in transport fares represents another attempt by the Tinubu administration to address the cost-of-living pressures facing Nigerian households following the removal of the petrol subsidy.

The government's expanding CNG infrastructure, vehicle conversion programme and planned deployment of electric vehicles could create a more diversified transport-energy system over time.

For the housing market, lower and more predictable commuting costs could improve access to housing in areas farther from major employment centres and support the development of new residential corridors.

However, the success of the October 1 target will depend on the availability of vehicles and fuelling infrastructure, the participation of transport operators and effective coordination between federal and state authorities.

If the planned savings reach commuters consistently, the policy could provide some relief to household budgets while strengthening the connection between transportation, urban development and housing affordability.

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