Friday, April 19, 2024

Fuel Price Hike: Nigerians brace for more inflation as Yuletide approaches

The Buhari administration hikes fuel prices yet again this week, prompting concerns that prices of food, services and commodities would rise.

• November 14, 2020
Nigerian masses
Nigerian masses

Nigeria’s inflation rate may rise as high as 16 per cent before the end of 2020, experts told Peoples Gazette Saturday.

Higher petrol prices — engineered by the removal of subsidy early March has seen the country’s inflation rate soar over the past months.

The National Bureau of Statistics pegged Nigeria’s inflation at 13.71 percent in September, the highest since March 2018 when it was 13.34 percent.

The NBS also reported a remarkable increase in food inflation, which soared to 16.66 per cent in September 2020 from 16.0 per cent in August; indicating over 108 per cent rise since 2015.

Struggling Nigerian households with dwindling income have remained on the receiving end of the steep rise in food prices.

The country’s food inflation is, however, projected to rise astronomically with the recent hike in the pump price of petrol.

The Petroleum Products Marketing Company (PPMC) announced in a memo Wednesday that fuel would be sold to marketers at the depots at N155.17 per litre  — an increase from N147.67 per litre in October.

The agency said the new ex-depot price, which took effect from November 13, estimates the minimum pump price of petrol to be sold at N161.36 per litre. Independent petroleum marketers, nonetheless, insist that the pump price of the product would range from N168 to N170 per litre.

Lagos-based economist Adedamola Adejuwon told the Gazette that the high cost of living will only get worse for Nigerians in the forthcoming yuletide.

“The fuel hike will only make things harder for Nigerians. It will lead to a very significant inflation growth because of its ripple effect,” Ms. Adedamola said.

“Transportation costs will scale up, and with December increases factored into it, I’m hoping we don’t eventually reach 15 per cent inflation rate before the end of the year.”

“With unstable prices of goods and services, the spending pattern of many citizens will reduce, and that’s less economic activity in the country,” she added.

Financial analyst Tolulope Eweniyi paints a gloomy picture of what lies ahead for Nigerians.

“We have a looming food inflation in the country. We can see evidence of it in the prices of food such as onions, garri, rice and other staples that are meant to be cheap for the average Nigerian”, she told the Gazette.

“Inflation is projected to hit around 16 per cent by year end and around 20 per cent in the first quarter of 2021 when the impact of the increase in petrol and electricity prices start to show.”

The Yuletide has been characterised over the years by arbitrary increase in food prices and transport fares for Christmas and New Year travellers. 

The new petrol hike is, however, touted to compound the problem in large proportions.

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