In the first quarter of 2026, Nigeria's transportation sector found itself at the intersection of external geopolitical shocks and long-standing structural inefficiencies, as the ongoing Middle East crisis triggered a sharp rise in fuel costs, exposing deep vulnerabilities in how people and goods move in the country, BENJAMIN ALADE reports.
Rising fuel costs and operational strain
Nigeria's transportation sector faced a turbulent first quarter of 2026, with operators, commuters and policymakers grappling with the ripple effects of the ongoing crisis in the Middle East, which has driven up global oil prices and intensified domestic cost pressures. Across the road, air, and logistics segments, the industry's performance in Q1 reflected a sector under strain — marked by rising operating costs, reduced consumer demand, and deep structural vulnerabilities tied to energy dependence.
Associate Professor of Marketing at Keele University, United Kingdom, Emmanuel Mogaji, described the quarter as “operationally strained, cost-inflated and structurally exposed”. According to Mogaji, the surge in global crude oil prices translated directly into higher fuel and aviation costs, disrupting mobility and amplifying inflationary pressures across the economy.
“Everyone around the world is aware of these issues, but there is clear evidence of systemic weaknesses in Nigeria,” Mogaji said. “Dependence on imported refined fuel, limited buffering mechanisms, and poor multimodal coordination mean that external geopolitical shocks quickly cascade into domestic transport instability,” he added. He said Nigeria's position as an oil-producing country makes the situation more worrisome, demanding an integrated transport system capable of absorbing shocks while maintaining service continuity.
Impact on commuters and operators
Data from industry operators indicate that petrol and diesel prices rose by more than 50 per cent within two months, significantly increasing transport fares and logistics costs. The surge has forced many commuters to reduce travel frequency, while operators struggle to maintain profitability.
On government response, Mogaji expressed cautious optimism, noting that the Federal Government's stance against fuel subsidy leaves little room for immediate relief. “I do not think we should expect anything special from the government regarding rising fuel. It argued that the whole world is facing similar challenges. This means commuters and operators will have to adjust their travel behaviour and service models,” he said. However, he emphasised the need for improved access to alternative transport modes, particularly mass transit systems, as a more sustainable response.
Policy recommendations from industry leaders
Offering a more policy-driven perspective, Deputy Managing Director of RT Briscoe and Chairman of the Automobile and Allied Services Group at the Lagos Chamber of Commerce and Industry (LCCI), Femi Eguaikhide, said government intervention remained critical in cushioning the impact. He outlined several short-term measures, including expanded subsidies for mass transit systems such as BRT, rail, and state-run buses, as well as increased route coverage to ease the commuter burden.
Eguaikhide also called for targeted support for food logistics, suggesting diesel subsidies for trucks transporting agricultural produce to urban markets, alongside tax waivers on spare parts and levies affecting commercial transport operators. For the medium term, he recommended accelerating Compressed Natural Gas (CNG) conversion, expanding local refining capacity, building strategic fuel reserves of up to 120 days, and investing in non-fuel transport infrastructure, such as rail and waterways, to reduce cargo costs.
Expert analysis on sector performance
Also, a professor of transport planning and policy at Lagos State University, Samuel Odewumi, described Q1 performance as “mixed, but under significant stress”. He noted that while there was increased activity in logistics, maritime reforms, aviation demand and road transport, the Middle East crisis exposed the sector's vulnerability to imported energy shocks.
Odewumi said: “Rising crude oil prices translated quickly into higher petrol, diesel, and aviation fuel costs. This has driven up fares, haulage charges, food distribution costs and airline operating expenses.” Odewumi, who doubles as the acting Vice-Chancellor, University of Uyo, advised against blanket subsidies but urged the government to deploy targeted interventions. He suggested providing subsidised crude to local refiners to reduce pump prices, while using part of the oil revenue windfall to support public transport systems, including buses, rail services and structured mobility schemes for workers and students.
He also mentioned the need to address non-fuel cost drivers, such as port inefficiencies and illegal toll collections on highways, which continue to inflate logistics expenses. “Fuel prices are only one part of the transport cost equation. Reducing bottlenecks across the system is equally important,” he said.
Call for structural reforms
As the Middle East crisis persists, stakeholders warn that Nigeria's transport sector would remain vulnerable without structural reforms. The consensus among experts is clear: beyond short-term relief, the country must prioritise energy security, multimodal integration, and sustainable transport alternatives to weather future global shocks.
