Abstract This paper presents the life cycle environmental impacts and economic costs of the passenger transport sector in Nigeria for 2003–2030. Four scenarios are considered: business as usual (BAU); increased use of public transport (buses) at the expense of cars (LOWCAR) and motorcycles (LOWMC), respectively; and high economic growth with increased car ownership and decline of public transport (HICAR). The findings show that for the BAU scenario the life cycle environmental impacts double over the period, despite the assumption of increased fuel and vehicle efficiency of 35% over time. The total fuel costs at the sectoral level increase three times, from US$3.4 billion/yr in 2003 to US$9.7 billion in 2030. Increasing the use of buses would reduce the environmental impacts on average by 15–20% compared to BAU; at the same time, the total fuel costs would be 25–30% lower. If the use of cars grows much faster due to a high economic growth as in HICAR, the environmental impacts and fuel costs would increase by 16% and 26%, respectively. These results demonstrate clearly that future transport policy in Nigeria should promote and incentivise public (bus) transport as a much more environmentally and economically sustainable option than transport by cars and motorcycles.