Analysis of Road Transport Pricing Mechanisms and Their Equity Implications in Nigeria

Road transport pricing mechanisms, including fuel taxation, toll charges, and urban congestion fees, have complex equity implications that must be carefully managed to avoid disproportionate burdens on low-income households. This study analyses existing and proposed road transport pricing mechanisms in Nigeria and their equity implications, drawing on empirical household expenditure data and stakeholder perspectives. Secondary data from the National Bureau of Statistics Living Standards Survey and transport expenditure modules are combined with primary survey data from 500 urban and rural households across Lagos, Kano, Enugu, and Maiduguri. The study employs benefit incidence analysis and Gini decomposition to assess the distributional impact of fuel taxation and toll charges under current and alternative pricing scenarios. Findings confirm that fuel taxation in Nigeria is regressive in its rural impact but progressive in urban settings, where wealthier households disproportionately consume privately driven petroleum. Toll charges are found to be regressive across both settings, as lower-income households lack alternatives to toll routes. A revenue recycling simulation demonstrates that redirecting 40 percent of toll revenues to public transport subsidies can substantially offset the regressive impact of toll charges. The study addresses a gap in quantitative equity analysis of transport pricing in the Nigerian policy literature and provides an analytical framework applicable to other sub-Saharan African contexts. Recommendations include equity-corrective measures in road pricing reform design and formal incidence analysis requirements for all new transport pricing proposals. Keywords: transport pricing, equity, fuel taxation, toll charges, Nigeria.