Nigerians and fuel price hike


Last week Wednesday, Nigerians received a September gift from government. The Petroleum and Pipeline Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), increased the price of petrol from N143 to N151 per litre. The Nigeria Electricity Regulatory Commission (NERC) simultaneously hiked the price of electricity tariff. Don’t ask me why the government took this bold, daring but unpopular decision. Even before it finally settled for these actions, indicators have continued to emerge that the days of subsidy will be over. Why?

The government says it cannot afford or continue to dole out handouts to Nigerians in the name of subsidy. It is reported that the government has been spending billions if not trillions in subsidy which often ended in the pockets of few marketers.
Therefore, government feels providing more subsidy to Nigerians will rob it of enough revenue to carry out infrastructural development. Amidst Covid-19 pandemic which seriously affected the country’s economy, one cannot rule out these measures from government even if Nigerians will not welcome it.
Since the announcement of hike in prices of petrol and electricity by government, there has been outrage, condemnation and mixed reactions that continue to trail the move. Many Nigerians view the development as wrong and untimely.

For instance, since the outbreak of coronavirus with its attendant or grave consequences, many Nigerians have lost their means of livelihood.   In the last five months, businesses have collapsed and many people have lost their jobs due to the novel Covid-19 pandemic. Besides, there is galloping inflation which made prices of goods and services to go beyond the reach of the common man.


It is lamentable to say, when Nigerians are losing purchasing power as a result of inflation and hustle to eke out a living, the news of hike in prices came knocking. With the hike in prices, Nigerians will pay more for erratic power supply and petroleum products. You will agree with me that this hike in prices will have negative multiplier effects on the economy.
Other sectors which depend on petroleum and electricity like transportation, manufacturing and small scale businesses may be forced to increase the prices of their goods and services. Sadly, the pauperised downtrodden or poor masses would bear the brunt. With the bitter price pill forced into the mouth of Nigerians, one is at a loss to conclude if there is any relief or hope in sight for the country?


There is nothing wrong for government to stop the petroleum subsidy, even though, the advanced countries still subsidise some goods and services. In the case of Nigeria, it is alleged that the petroleum subsidy has been fraught with corruption and irregularities. It is also believed that deregulation is the only way to unbundle the petroleum sector, guarantee efficiency and attract foreign investors.
This, of course, is the truth. But the poser remains: why is the government punishing Nigerians for the sins of a few? In the US and other developed countries where subsidy is a matter of life and death, nobody hears shoddy deals because the system has been structured to help the many not the few. Sadly, this is not the case in Nigeria.


For our moribund power sector which gulped billions of dollars in the last 20 years and poorly privatised, the distribution companies have complained of incurring losses since they took over hence the wisdom from NEDC to come to their aid with the price hike.   Another question on the lips of Nigerians is whether government has prepared palliative measures to cushion the effects of the new price regime? However, it is not debatable to say Nigerians will experience steep rise in the cost of living in the coming years.
The hike in prices has come at a wrong time when international and national agencies like World Poverty Clock and National Bureau of Statistics (NBS) have continued to reel out shocking figures of poverty in the country. It is estimated that more than 90 million Nigerians are living below the poverty line or one dollar per day.


With the removal of subsidy coupled with high inflation in the country, the poverty rate may leap frog to alarming rate. In 2012 when the Jonathan administration attempted to remove the subsidy, the present leaders then in opposition resisted and protested.


Today, those who promised to fix our moribund and comatose refineries within their first year in power have failed to fulfill the promise. The country’s four refineries are not fully operational and have continued to incur losses to the tune of billions year in year out. What a sad tale! It behoves on government to go beyond price hike rhetoric and come up with a magic wand that will salvage the country’s tattered and battered economy. 
Ibrahim Mustapha,Pambegua, Kaduna state 08169056963   

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