Fuel gulps 73% of tricycle operators’ income in northern Nigeria – Report

Tricycle operators in northern Nigeria are facing severe financial strain, with fuel expenses now accounting for approximately 73% of their income, according to a recent study. The report, presented by Mukhtar Abdulhameed, CEO of Carbon Assets Limited, highlights the critical impact of soaring fuel costs on this vital informal transport sector.

“

Between 97 and 99 per cent of northern Nigerian tricycle operators have reported lower income since 2023, following the removal of fuel subsidies.

The study, which focused on Kano, Kaduna, and Jigawa states, found that between 97% and 99% of operators have experienced reduced income since 2023, following the removal of fuel subsidies. In some cases, such as in Jigawa State, operators are spending more on fuel than their daily take-home pay. This situation is exacerbated by rising global oil prices, partly attributed to geopolitical tensions in the Middle East, which have driven up petrol prices in Nigeria by over 50%.

Despite these challenges, there is a strong willingness among operators to transition to e-mobility. The study revealed that 94% to 98% of respondents expressed interest in Battery-as-a-Service (BaaS) models, where batteries can be swapped rather than purchased outright. Currently, operators spend an estimated N9,600 daily on fuel. Under a battery-swapping system, this cost could be reduced to approximately N4,000, leading to potential annual savings of about N1.68 million per operator.

“

operators, who currently spend about N9,600 daily on fuel, could pare operating costs to about N4,000 under a battery-swapping model, resulting in daily savings of about N5,600, or approximately N1.68 million annually.

Nigeria's existing digital payment infrastructure is deemed ready to support electric mobility. Furthermore, the report identifies climate finance opportunities, noting that a 10% shift to e-mobility could exceed thresholds for green investment. However, battery performance remains a significant barrier, with 77% to 85% of operators citing battery failure as their primary concern. Building trust in electric mobility will hinge on demonstrated performance, according to the study.

“

Between 77 and 85 per cent of operators identified battery failure as their primary concern, with existing cases of battery failure issues already reported in Kano State.