Transport fares in Ghana have remained stubbornly high, even as fuel prices have seen a decline in recent months. This puzzling situation has left many commuters frustrated, especially since fare hikes are often justified by rising fuel costs. Despite five consecutive fuel price reductions since February 2025, the Ghana Private Road Transport Union (GPRTU) has rejected calls to reduce transport fares. Let’s explore the factors contributing to this situation.
This situation is not new. In April 2024, transport fares were increased by up to 20% despite a reduction in fuel prices. Transport unions justified the hike by pointing to rising costs of spare parts, lubricants, and other operational expenses. Similarly, in December 2022, fuel prices dropped by 15.3%, but transport fares remained unchanged due to inflation and the high cost of vehicle maintenance. These examples highlight the complex factors that influence fare adjustments beyond fuel prices alone.
The role of fuel prices
Fuel prices indeed play a crucial role in determining transport fares, but the relationship between the two is not always straightforward. Across Africa, the dynamics of fuel prices and transport fares vary due to factors like government policies, inflation, and operational costs.
In countries like Nigeria, where fuel subsidies have historically kept prices low, transport fares have often remained relatively stable despite fluctuations in global oil prices. However, when subsidies are reduced or removed, as seen in recent years, transport fares tend to rise sharply, reflecting the increased cost of fuel. This was evident in 2023 when the removal of fuel subsidies led to a significant hike in transport fares, even though global oil prices were declining.(africabusinessinsider.com)
In South Africa, fuel prices are influenced by global oil markets and the exchange rate of the rand. While fuel price reductions have occasionally occurred, transport fares have not always followed suit. This is because transport operators face additional costs, such as vehicle maintenance, insurance, and wages, which are not directly tied to fuel prices. For instance, in 2024, despite a drop in fuel prices, transport fares remained high due to rising inflation and the cost of spare parts (primebusiness.africa). Similarly, in Kenya, the cost of public transport is influenced by more than just fuel prices. Operators often cite the high cost of vehicle maintenance and spare parts, which are imported and subject to currency fluctuations. In 2025, even as fuel prices dropped, transport fares in Kenya remained unchanged, with operators pointing to these additional expenses as justification(africabusinessinsider.com)
Rising operational costs
Rising operational costs have become a significant challenge for transport operators in Ghana, and the situation is deeply tied to the country’s economic conditions. Inflation and the depreciation of the Ghanaian cedi have had a cascading effect on the cost of maintaining vehicles, which directly impacts transport fares.
One of the primary issues is the cost of spare parts. Many of these parts are imported, and as the cedi weakens against major currencies like the US dollar, the prices of these imports rise sharply. For example, in 2024, the cedi depreciated by an average of 24.8% against the dollar, significantly increasing the cost of spare parts2. This has made it more expensive for drivers and transport operators to keep their vehicles in good condition.( thebftonline.com)
Additionally, inflation has driven up the prices of essential items like engine oil, tires, and other maintenance supplies. Ghana’s inflation rate reached 23.8% in December 2024, further straining the budgets of transport operators. These rising costs are not limited to spare parts but extend to other operational expenses, such as insurance premiums. For instance, motor insurance tariffs increased by 10% in early 2025, adding another layer of financial pressure on drivers.
Transport operators have also highlighted the difficulty of recovering from past economic shocks, such as the government’s Domestic Debt Exchange Programme (DDEP), which affected the liquidity of many financial institutions. This has made it harder for operators to access affordable loans for vehicle repairs or upgrades.
The combined effect of these factors means that transport operators are spending a significant portion of their earnings on vehicle repairs and upkeep. This leaves little room for fare reductions, even when fuel prices drop. The financial strain has led some drivers to consider fare increases to cover their rising costs (thebftonline.com)
Structured fare adjustments
In Ghana, transport fares are not adjusted arbitrarily. The Ministry of Transport, in collaboration with transport unions like the GPRTU, uses a structured formula to determine fare changes. This formula considers multiple factors, including fuel prices, inflation, and the cost of spare parts. According to the Ministry, fare reductions are only implemented after thorough evaluations and discussions with stakeholders. This process can take time, delaying any potential fare decreases.
GPRTU’s stance
The GPRTU has made it clear that lower fuel prices alone are not enough to warrant a reduction in transport fares. Despite the five straight fuel price reductions since February 2025, the union cites the rising costs of spare parts, lubricants, and other operational expenses as reasons for maintaining current fare levels. They argue that these additional costs have a greater impact on their operations than fuel prices alone. The GPRTU has also stated that they would only consider fare reductions if fuel prices drop significantly, such as to GH¢10 per litre.
Financial sustainability for drivers
For many drivers, maintaining financial stability is a constant struggle. Even with lower fuel prices, the cumulative effect of months of high costs for fuel, spare parts, and other expenses has left many operators in debt. Drivers argue that reducing fares would make it even harder for them to cover their costs and support their families. Some drivers have also highlighted the lack of government support in addressing these challenges.
Calls for Government intervention
Some transport unions and passengers have called on the government to intervene by further reducing fuel prices or providing subsidies for spare parts and maintenance. They argue that such measures would ease the financial burden on drivers and create room for fare reductions. However, these proposals have yet to gain significant traction. The government has emphasized the need for collaboration with stakeholders to maintain stability in the transport sector.
The broader economic challenges in Ghana also play a role in this issue. Inflation, currency depreciation, and high import costs have created a challenging environment for transport operators. These economic pressures make it difficult for operators to reduce fares, even when fuel prices drop. Additionally, the cost of living for drivers and their families has increased, further complicating the situation.
While lower fuel prices might seem like a good reason to reduce transport fares, the reality is far more complex. Rising operational costs, structured fare adjustment processes, and the financial struggles of transport operators all contribute to the current situation. Until these underlying issues are addressed, commuters in Ghana may have to continue paying high transport fares, regardless of fluctuations in fuel prices.
