Korope: Fuel subsidy removal hits Osun commercial minibus operators hard

Oluwaseun Faniran was having a snack of groundnuts as he idly chatted with fellow drivers and other habitues of Olaiya Junction, a major bus park in Osogbo, the Osun State capital in South West Nigeria.

“That is what I can afford for lunch now,” Mr Faniran said as this reporter engaged him and his colleagues in a dialogue.

He now spends more time at the park since the end of May when President Bola Tinubu removed the subsidy on petrol. The announcement triggered a hike in the pump price of the commodity, shooting transport fares and prices of goods and services up across the country.

Some of the worst affected in Osun State are operators of mini buses, locally known as korope in the state capital, Osogbo. Korope is popular with commuters for their cheap fares and flexibility.

“The highest you paid for a ride in Korope in the past was N100,” Asimiyu Kayode, a korope driver like Mr Faniran, said. “And you sit comfortably, not like inside the taxes or bigger buses that cramp four or five people on a seat meant for three.”.

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But since fuel subsidy was removed and fuel price surged, commutters in Osogbo appeared to have adopted other modes of getting around, and korope operators say they are feeling the impact most.

Following the removal of subsidy, the fare for a ride in korope doubled but it did not stop there. It now depends on the distance covered.

The drivers said they had no other choicer than to pass the high pump price over to commuters. Because many people find the new fares too high, korope operators said they are recording losses every day.

Mr Faniran said his life is beginng to change as a result. Despite increase his fares, he does not have much left after deducting money spent on fuel. Unnable to keep to the vehicle’s service schedule, Mr Faniran said the bus developed a fault for which the mechanic charged him N150,000 to fix. But the driver, who is yet to fully pay for the purchase of the vehicle, which he got on hire purchase, said he had no money for the repair.

“I had no one to turn to for help after the bus broke down, so I spoke with the owner. But he gave me a condition that I would pay back N300,000 if he lent me the N150,000.”

Mr Faniran said he could not add the N300,000 to his outstanding debt to the original owner of the vehicle.

He has parked the korope at home for over a month now, hoping the fuel subsidy problem would somehow go away. Every day, he now treks from his house in Isale Arole to the Olaiya Junction, where he sits the day away in the company of other drivers in the same condition as his own.

“Staying at home is out of the question. I can’t watch my wife and children suffering because I can’t provide for them again. I have been trekking here every day to be with my people,” he said as he munched his groundnut snack.

Mr Faniran said fuel subsidy removal has destroyed not just his business. “My wife doesn’t understand the situation,” he lamented. “It has affected my home.”

The driver recalled the situation not long ago when business was good and he was making “regular delivery” (payments in instalment) to his bus owner every weekend.

Like Mr Faniran, many people in Osogbo now trek long distances to their destinations, when they cannot avoid going out.

“I trekked from OSBC to Ayetore recently,” Dauda Jamiu, an artisan resident in the city, said.”I am going to Abeere and I have spent almost 1k (one thousand naira) from my place to here (Olaiya Junction). I will still have to trek a little more so that I can manage what I have left in my pocket.”

Wasiu Ganiyu, a 42-year old father of three primary school children, also had a korope. He said he used to buy N4000 fuel every morning and usually recovered the money with a profit before noon. Then, he paid his “delivery on time” and had something left to take home.

“My children are going to private school. I could afford it, I used to pay their school fees on time. Now, I can’t even feed them well,” Mr Ganiyu said.

But his loss of livelihood has already affected the education of Mr Ganiyu’s children – Aliya, Hassan and Hassanat. Eight years old Aliya missed her common entrance examination into secondary school. “She is very brilliant and is one of those topping her class at Al Hikma Nursery and Primary School in Osogbo,” Mr Ganiyu said.

“I could not raise the school fees of the three and the charge for Aliya’s exam. Everyone I turned to could not help too. I have not been able to even visit their school because going there empty-handed is pointless. I don’t know if the school will conduct another exam for Aliya if I have the money. She is still sad about it,” the korope driver said.

Background

Following global oil crisis of the early 1970s, the Nigerian government introduced fuel subsidy to stabilise the prices goods and services. Introduced in 1973, the subsidy kept down the price of petrol for Nigerians. The government later found out that it was losing too much revenue as corruption added to the cost and eventually distorted the system.

Subsidy became even more expensive with the collapse of Nigeria’s four government-owned refineries, which gradually led to the importation of almost all the fuel consumed in the country.

The National Assembly had in 2021 passed the Petroleum Industry Act which mandates the government to stop spending on fuel subsidy. The lawmakers gave the government 18 months to stop the payment but former President Muhammadu Buhari asked for an an extension of the deadline to the end of June this year. However, on 29 May, President Tinubu caught everyone by surprise when he announced the removal in his inaugural address.

This led to the price of petrol more than tripling from ₦194 to over ₦600.

“I used to buy N4000 fuel before to work for the whole day,” Mr Ganiyu recalled wistfully. “After the fuel subsidy removal, I was buying N10, 000 fuel daily but I never realised up to the N10,000 I used to buy fuel.”

According to korope drivers who spoke with PREMIUM TIMES, the owners of the mini buses they drive had to change the terms of the agreement on which they gave out the vehicles on hire purchase. But many drivers found that they could not meet the terms so they returned the mini buses to the owners.

According to the korope drivers, a lot of them now sit at home or moved to other businesses, while those still on the roads complain of frustration.

Asimiyu Kayode, a commuter, narrated a recent experience he had in a mini bus in Osogbo.

“The korope I was riding in nearly hit another one intentionally because of a passenger and they were cursing themselves,” Mr Kayode said.

“I spend more than one thousand naira to and fro from Ilesha Garage to town every day. Before, that was is enough to travel to another town,” he added.

Socio-economic effect

A management and development consultant, Segun Oriyomi, expressed the fear that the current situation may lead to unrest in the country.

“The rate at which the prices of commodities and transportation is rising is alarming. Income is not increasing which has reduced the purchasing power of Nigerians, especially the low income earners and youth.”

Mr Oriyomi urged the government to help vulnerable people in the society.

“Aside from the palliative measure, the state government should also increase wages and create more jobs. Even though the long-term objective of fuel subsidy removal is to create more jobs and accelerate development, the government should introduce programmes that will create more jobs.”