Nigeria fuel price hike likely to worsen living conditions
President Muhammadu Buhari’s government last week increased the pump price of petrol from N148 to N151.56 per litre, the third consecutive increase in three months.
The Nigeria fuel price hike comes barely 24 hours after the government approved an increase in electricity tariff by over 300 per cent.
The federal government, while justifying its decision said that the effort was in the best interest of the people. But, Nigerians believe otherwise, condemning the timing as millions groan under the negative impact of COVID-19 on the economy.
A cross-section of Nigerians who spoke to Nigeria Today lamented that since petrol cost affects the prices of every goods and service, the increase in petrol prices at this period will worsen the already rising cost of living due to the rising inflation.
They argued that transport fares, food prices, utility bills, school fees would definitely increase which in turn multiply the hardship of the citizens in the country.
While reacting to the Nigeria fuel price hike, a blogger residing in FESTAC area of Lagos who preferred anonymity decried the wrong timing.
“The sad part is that some people’s salaries have been slashed or will not be increased with the fuel price. So, it would be more problematic for people in this period of coronavirus. There is already so much that Nigerians have to contend with,” she said.
Also speaking, a public servant and poultry farmer in Ibadan, the Oyo State capital, Mr. Oluseye Fakayode, however, said if the decision was right, it was not the time to be implemented.
He said: “This is not the best time for the government to embark on such action. A time when hardship is the order of the day because of the coronavirus and mismanagement of resources.”
“I knew for years that if our government should stop the fuel subsidy, fuel prices will rise. The question is, when would our refineries start to work effectively and efficiently?” Mr. Fakayode added.
On her part, a food items seller, Mrs Kate Ossai said, “The government is just frustrating Nigerians. There is shortage of money in the economy because COVID-19 is affecting market already. Now prices of things will go up, including food items.”
It was the same argument with a commercial bus driver, Mr. Kamal Adeyeye who lamented that both increases in petrol pump price and electricity tariff are an act of callousness and insensitivity on the part of President Buhari-led administration.
“We drivers will increase transport fares. And, you know what that means? Everyone that sells something will also increase the price. This will affect food, building materials, clothes and general business. To me, this Buhari’s administration is wicked. How can he increase petrol and electricity bills at the same time?” he lamented.
In the same vein, a secondary school teacher, Mr. Samson Chibuzor lamented that the Nigerian people would continue to suffer until this country gets viable leaders.
“Let me tell you categorically that this country will just be moving from one economic hardship to another, and it is the masses that would bear the brunt except we have the boldness to vote capable leaders into office.”
According to him, “since Nigeria mainly relies on crude oil as a source of generating revenue, this would persist for a long time until something like an economic bailout happens where diversification of the economy is real and not merely on paper.”
PRICE INCREASE TO AFFECT EDUCATION SECTOR
Meanwhile, the increase in petrol prices also presents a fresh predicament for parents who are planning for the resumption of their children in schools across the country. It is highly likely that shcool proprietors and sellers of learning materials may factor the recent increase into their cost of operatios and goods and services.
“School fees, books, transport fares and other materials needed for learning would be negatively affected,” observed Mrs Kasumu who sell kitchen utensils. “There is no argument about this. Prices of goods will go up in the market. My three children will resume schools now. Where will I get the money from? Transport fares for their school buses will increase. School fees are there and books and uniform including other materials. If only the government can just help us to reduce fuel price?”
Another secondary school teacher and network marketer, Mr. Dare Fayehun in his own reactions called on the government to diversify as he pointed out that the rise in fuel price automatically creates an upsurge in the exchange rate thereby increasing the cost of goods and services.
He said: “The price of fuel will definitely lead to a steep rise in the exchange rate. This, in turn, affects the prices of goods and services. A hike in the pump price of petrol, the cost of transportation will skyrocket since the purchase of goods and services require transportation in Nigeria. I think this is the best time Nigeria should switch to alternatives sources of energy and also explore the untapped wealth of agriculture and telecoms marketing such as Recharge and Get Paid.”
The removal of the subsidy on petroleum imports and the increase in petrol prices is a dilemma that the government has had to content with over the past 5 years.
While it has become a consensus that the petrol subsidy must go, there was never an agreement on when the best time to let go would be.
The government has now said it would no longer wait and it could never fix prices of petrol prices as the era of petrol subsidy has come to a gradual end.
However, Nigerians’ frustrations over the fuel price hike are not entirely out of place. The COVID-19 pandemic has brought the economy to its knees, as it recorded a 6.1 per cent negative growth in Q2 and a recession is forecast in Q3.
Already, no fewer than 21.7 million Nigerians have no jobs, according to the latest job reports by the National Bureau of Statistics released last month.
At this rate, analysts contend that increase in fuel prices and electricity tariffs will only worsen the unraveling economic hardship in the country.
It is therefore imperative for the government to invest the proceeds of the petrol subsidy on economic stimulus and palliative that will alleviate the economic hardship faced by millions of Nigerians.