…By Roland Peterson for TDPel Media.
Commuting to work in Lagos, Nigeria’s densely populated megacity of around 20 million people, has long been a nightmarish experience.
However, the situation has taken a turn for the worse with a sharp increase in petrol prices.
Following President Bola Tinubu’s announcement on May 29, 2023, that subsidies were being abolished, fuel prices nearly tripled across Africa’s most populous nation.
The surge in fuel prices has had a ripple effect on transportation costs, causing a significant rise in the prices of essential goods.
Food prices have soared, putting additional strain on households.
Moreover, those who rely on generators for electricity are now faced with the added burden of increased fuel expenses.
Abdullah Akinyode, a minibus driver in Lagos, expressed his guilt over having to double his prices, acknowledging the immense difficulty faced by the population.
As a result, many people are choosing to stay home as salaries remain stagnant.
Nigeria’s Oil Dependency and Subsidy Removal
Nigeria, known for its abundant oil reserves, struggles with limited refining capacity.
To meet domestic demand, the country has long relied on importing refined oil by exchanging crude oil.
This practice, coupled with subsidizing domestic fuel prices, has severely drained the nation’s revenue and foreign exchange reserves, contributing to escalating debt levels.
Although experts have advocated for the removal of these costly subsidies and have applauded the government’s decision, concerns are mounting regarding the lack of measures to mitigate the inflationary impact on food, power, and transport.
Struggling to Cope with the Inflationary Impact
At Abuja’s bustling Utako market, Bo Eze finds himself confronted with the harsh realities of soaring petrol prices.
Eze, who transports staple food items such as cassava-based gari, has been forced to increase his prices due to the steep rise in fuel costs.
One bag of gari, which used to cost 35,000 naira (about 75 dollars), has now jumped to 45,500 naira (about 98 dollars).
The overall increase in transportation costs has also affected other market vendors, such as Augustin Ede, who sells goat meat. Ede shared his frustration over the rising cost of transporting animals, resulting in him having to reduce his stock.
The impact of the fuel price surge extends beyond the market, affecting everyday consumers like Prudence Ekuvero.
As a mother of four earning around 300 dollars a month, Ekuvero finds it challenging to manage household expenses.
The increased prices for goods, including goat meat, have put a strain on her budget.
Some people are rushing to buy goods in anticipation of further price hikes, exacerbating the situation.
Inflationary Impact on Power and Business
Amnesty International Nigeria has emphasized the importance of implementing social protection measures alongside the removal of fossil fuel subsidies.
Even prior to the subsidy removal, over 80 million people in Nigeria were living below the poverty line, according to the World Bank.
Disturbingly, the United Nations has warned that a significant portion of this population is now facing acute hunger.
In cities like Kano, where high temperatures are prevalent, Shehu Ahmad is among those affected by the fuel price surge.
With the increased cost of petrol, Ahmad has had to forgo running his generator, resulting in dark evenings without fans.
Erratic electricity supply in Nigeria is a longstanding issue, and the rising cost of power has made it even more challenging for households.
Businesses are also feeling the impact, as employees like Mustapha Abubakar, an IT intern, are forced to return home due to the lack of electricity.
Abubakar expressed uncertainty about the measures that will be introduced to address this crisis, as his company informed him that they can no longer afford to provide petrol for the generators, leading to necessary adjustments.
In conclusion, the recent surge in fuel prices in Nigeria’s megacity has worsened commuting conditions, increased transportation costs, and affected the prices of essential goods.
The removal of subsidies, while supported by experts, has raised concerns about the inflationary impact on food, power, and transport.
As Nigeria grapples with these challenges, social protection measures and comprehensive solutions are needed to alleviate the burden on the population.