Reasons of Transportation Hike During Christmas In Nigeria

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The fact of the matter is that this is Yuletide season, a period of the year that many people , mostly Christians use this time to travel either to celebrate Christmas, New Year or even have some time off to reevaluate their previous year or have an end of the year vacation. This period always witness transportation hike and as usual the same time of the year folks complain and grumble ,which is highly understandable and the economists have an answer for this from Adam Smith to the modern day colleagues.

Now in economics, this is known as inflation.  And it is called the  Demand-pull inflation! This is always the case when aggregate demand in an economy or sector  outpaces aggregate supply. More accurately, it should be described as involving “too much money spent chasing too few goods and services,” since only money that is spent ongoods and services can cause inflation. This is just the way it is, it is a process that is expected. This period is when a whole lot of folks travel out of their areas especially the Christians to celebrate mostly Christmas! Now, in a country like Nigeria with insufficient transportation and lack of rail network, travelling public gone for either the buses which makes the bus owners inflate the price ! This resultant effect causes what is described above as the demand pull inflation.

Those complaining of hike in transportation fare this season should understand the dynamics of the transportation industry during this period. If there had been many alternatives such as cheaper air travel, more rail network or even government buses on the road! This wouldn’t be an issue and this type of inflation wouldn’t arise.

The season is characterized by a one-sided demand surge in major commercial cities such as Lagos, Abuja, Port Harcourt or even southern cities which are mostly Christian cities and it is it because of Christmas and New year celebration.

Transportation companies load their vehicle fully from those major commercial cities to various destination cities across the country. And you don’t blame transporter here all the way, Nigeria being a capitalist economy, business owners would love to maximise profit and minimise cost unless a regulatory authority steps in.

Also you must know that most of these buses don’t so round tripping. They carry full passengers to their various destinations and most time return empty. They try to factor the cost of returning empty to the the ticket prices leading to inflation because most people are on one way .  It is like this, at the destination cities, there is usually very low demand sufficient for a full load during the return trip to the major commercial cities. So the companies often send back partially-loaded vehicles or empty vehicles to the major commercial cities, and the cycle repeats.

The hike in prices is a compensation mechanism for the low demand during their return trips. This was disclosed to us  by a company manager at Cross Country some years ago.

Anthony Nwosu & Ndianabasi Udonkang

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