Effects of Fuel Price Increase in Nigeria on Travel Expenditures

Abstract

The effects of the October 1994 gasoline price increase in Nigeria on urban travel expenditures are examined. Results show that, although the established inverse relationship between travel money expenditure and income has not changed, significant changes have occurred in travel money expenditures across socioeconomic strata. The fuel price elasticities of travel expenditures were below unity overall and across all socioeconomic strata, except for the highest age group considered. Thus the energy policy change has, in general, not produced adverse effects on travel expenditure. Elasticities are apportioned not only by income level but also by the levels of other socioeconomic factors that are usually considered in travel demand studies. Age has proved particularly relevant because elastic responsiveness was recorded for the respondents in the oldest age bracket. One implication of this is that in the future it may be necessary to evolve energy and transportation policies that will ensure preferential treatment for the elderly to cushion the effect of energy policy changes on this group of people.