President Muhammadu Buhari’s administration has increased the price of fuel to N151.56k per litre. The announcement was made by Pipelines and Products Marketing Company (PPMC) on Wednesday, September 2, 2020.
This increase has some grave implications. Let’s examine the implications of the price increase. Owei Lakemfa examined some of the deadly implications of the petroleum price increase.
- Most-poverty inducing strategy is increase in fuel price because the 200million peoplein Nigeria depend entirely on private road travels as there is no public mass transit. Yes, in Nigeria today there is no established public transport in the country. All the transport systems are private driven.
- Transport costs which have been hiked under the COVID-19 social distancing regime which requires fewer passenger capacity, would be further increased. In some states, the transport fares were increased by two due to the COVID-19 protocols, now it will be increased again, times two.
- The entire food chain from the farmer to the consumer is by road; so there will be increases in cost of fooddue to increase in cost of transportation. That is how it works. As the cost of transportation increases, it is built in the final product and the consumer bears the brunt. A product formerly sold for N1000 can now go for either N1300 or N1400.
- Most of the country operates in the informal economy trying to run small businesses as petty traders, tailors, vulcanisers and barbers. Virtually all of them rely on tiny, environmentally unfriendly generators which guzzle fuel. So a fuel price increase means an increase in their cost of doing business. The impact is also on the final consumer. The consumer of their product will pay higher.
5.. The manufacturing sector has mainly been in coma, a lot of it induced by high cost of energy; increasing fuel price merely adds to the burden more so with the country held hostage by government-backed electricity companies who in most cases, supply darkness. Generally, our homes and appliances, are run on generators. The increase in the price of fuel means increase in running our homes.
