According to a report by the World Bank titled “E-Trans-Electric mobility and transition in Nigeria: Strategy and implementation,” the fuel subsidy in Nigeria has hindered the development of e-mobility and the use of alternative vehicles such as electric minibuses, two-wheelers, and three-wheelers.
The report states that Nigeria allocated a significant amount of funds, approximately N4.39 trillion in 2022, to subsidize transportation.
However, this funding serves as a deterrent to the development of alternative mobility options.
The subsidization of petrol, according to the World Bank, discourages the adoption of alternative vehicles like electric minibuses,
two-wheelers, and three-wheelers, which are considered part of the e-mobility sector.
The bank suggests that with the removal of fuel subsidies, the introduction of e-buses should be supported by subsidy and financing solutions to offset the high upfront cost.
It also recommends that the electricity used to power these vehicles should come from renewable sources whenever possible.
Additionally, the report suggests developing regulations and policies at the federal level to adapt the tax regime, permission framework for importing new and used vehicles, and implementing proper storage, recycling, and disposal frameworks for batteries and e-waste associated with e-vehicles.
The long-term vision outlined by the World Bank emphasizes the adoption of mass transit systems like rail and bus rapid transport to reduce the number of commuter vehicles on the road, curb emissions, and encourage the use of zero-emission vehicles such as electric cars
and buses.
In summary, the fuel subsidy in Nigeria has been identified as a barrier to the development of e-mobility and the adoption of alternative vehicles.
The World Bank recommends removing fuel
subsidies, supporting the introduction of e-buses through subsidies and financing, using renewable energy sources for electricity, and implementing appropriate regulations and policies to promote the growth of the e-mobility sector in Nigeria.