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Food prices, transport fares increase across Nigeria as fuel subsidy removal bites harder

June 5, 2023

Transport fares and prices of essential goods and services shot up significantly across the country last week as Nigerians grappled with the ripple effect of the government’s decision on fuel subsidy removal.

PREMIUM TIMES’ correspondents who monitored the situation across the country found that food prices and transport fares for intrastate and interstate commuting increased significantly in most parts of Nigeria.

Fuel queues returned to Nigerian cities last week Monday as motorists scrambled to get petroleum products hours after President Bola Tinubu announced that the government would put an end to the fuel subsidy regime.

In his inaugural address at Eagle Square, Abuja, on Monday, Mr Tinubu declared that there would no longer be a petroleum subsidy regime as it was not sustainable.

“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.

“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” Mr Tinubu said.

In its reaction to the new development, the Nigerian National Petroleum Company Limited (NNPCL) on Wednesday approved an upward review in the pump price of petroleum nationwide, shooting the price up to an average of N500 from the erstwhile average of N189. The approval took effect from Wednesday, 31 May, the NNPCL said in a circular.

The pronouncement was trailed by panic buying and gridlock across filling stations in many parts of the country, even as regulatory bodies called for calm amid the chaos. The attendant consequences were reflected in the skyrocketed prices of goods, essential services, and food items.

Our correspondents in many parts of the country found that food prices and transport fares recorded an average of 100 per cent increase across cities and significant towns, raising worries among millions of poor Nigerians.

Lagos

In Lagos, Nigeria’s commercial nerve centre, the pump price of petrol shot up significantly, with some filling stations selling as high as N700 per litre.

Rashidi Lawal, a tricycle driver, plies the Iyana-Iba to Mile 2 route. He told PREMIUM TIMES that he now buys fuel of at least N12,000 daily.

“I have bought fuel of N12,000 today. I have made N20,000 after giving Agbero money. I will deliver N10,000,” he said.

The driver, popularly called ‘Kosoro 1’, said that when the announcement was made, transport workers doubled the fare the following day to meet the present reality.

He explained that transport fares along the Mile 2-Iyana Iba route cost N200 before the government announced subsidy removal, but the bus fare now costs N300.

“We are likely to take it back to N400 tomorrow. Before now, N7,000 fuel could take you around for the day, but not anymore,” he said.

“Most of us here don’t sleep at home; our houses are far. But what can we do? We sometimes sleep inside ‘Korope’ instead of going home.”

Many traders who run their businesses at the Ojo market shared similar stories of hardship and poor sales.

A ginger seller who identified herself simply as Mama Haliya said that she was hopeful that the new administration would do better and put smiles on the face of the masses, but the reverse has been the case. “They said Tinubu has been sworn in, there ought to be a positive difference, but now people (customers) aren’t even coming,” she quipped.

She lamented that the cost of transportation and logistics has led to an upward review of prices for her goods, triggering poor sales.

Another vegetable seller, Mama Iyabo, said that the latest development isn’t favourable to those at the lower rung of the economic ladder. “Agbara to Lusada used to cost N300; it’s now N500. It’s really affecting. People aren’t buying (vegetables) unlike before because (the size) is now smaller.”

A student of the Lagos State University (LASU) who identified herself simply as Qudroh and resides outside of the school campus said that in the last week, her daily expenses have increased as she now spends mostly on “transportation and feeding.”

Abuja

In the nation’s capital city, transport fares shot up by over 100 per cent on many routes as motorists lamented the increase in pump prices.

A PREMIUM TIMES reporter found that transport fare from Wuse Zone 2 to Wuse market that was previously N300 shot up to N600, while the fare for a trip with others in a cab from Aco Estate, Airport Road, to the secretariat that was N250, rose to N500.

“Normally, a cab from the front of my house to the market will only cost me N300. Now you have to beg to get a N600 drop to Wuse market that is here,” Dera Ejeh, a resident in Wuse Zone 2, said.

“Now I just respect myself by walking to the junction to take a N150 along cab, sometimes N100 depending on how lucky you are. I can take a drop while coming back from the market.”

Meanwhile, e-hailing companies have notified customers within the week, informing them of an increase due to the development. A ride in Bolt or Uber from Wuse Zone 2 to Wuye or Wuse 2 that generally would be N700 and N800 now goes for N1,500 or N1,700.

Alimodu Yusuf, a fruit seller in Apo, told PREMIUM TIMES that he would begin to sell sliced watermelon and pineapples for N300 and above to make up for the increase in logistic costs. “Selling for N200 at this point won’t help me, even though we have reduced the size. It will just be as if I came out to serve people. What will I give my wife and children? The transport is expensive,” he lamented.

Checks by PREMIUM TIMES at the weekend showed that prices of pepper and other foodstuff are relatively stable, but a kilo of goat meat sold for N3,200 in Wuse market now sells for N3,700.

Ezehi Grace, founder of Sister in Business, a group that buys foodstuffs in bulk, noted that the hike in petrol pump prices affected the general costs of goods. She said: “I share cow meat weekly and sometimes twice a week, depending on how my group demands it. On Tuesday, I went to Mararaba to share a cow. All we paid was N345,000, only for me to call back on Thursday to book for next week, and Mallam told me the size I normally will go for is nothing less than N400,000/N420,000.”

Ogun

In Abeokuta, the Ogun State capital, business owners and households expressed concerns about the effect of the policy on the local economy.

At the Oke Ilewo tech hub, Kabir Adelani said sales had been poor throughout the week, and many shop owners “decided not to open today at all.”

Mr Adelani, a business owner, said: “Usually, I make close to N300,000 to N400,000 every week, but I made N51,000 throughout this week. This thing is taking a serious toll on Nigerians, and this is just the beginning. Only God knows what things will look like in 10 days.”

Another trader at Omida market, Kemi Kareem, said the people would soon stage protests as foodstuff prices become unbearable. “Since this thing started, five litres of oil is now being sold for N6,900, up from N5,800.”

A commercial bus driver at the famous Brewery Park, Kabir Alalade, said, “Before now, we took N500 to Sango, but now we take N1,200 because aside from fuel hike, ‘Agberos’ too will take their own. Many (people) have turned back home after they got here and discovered that they cannot afford transport fare.”

For Adebayo Gbenga, a car wash attendant along Denro-Akute Road, “the subsidy removal has slowed down the business,” as he recorded poor patronage since it was announced.

“I need fuel to pump, and they ration electricity here, but my business is daily and more about fuel and water,” he said.

“Our business is towards weekends. Sometimes, I do 14 to 15 vehicles daily, which has reduced. Truly, the fuel has slowed down business, and I pray everything gets better soon.”

Kano

In Kano, Nazifi Muhammad, a tailor in the Fagge area of the metropolis, said he does not have the financial capacity to fuel his generator as pump prices rise.

“I have no option but to pray for a better life, but right now, I cannot even fuel my generator to work and expect any profits with the way people are paying a little money for sewing,” the tailor said.

Shazali Abdullahi, a businessman at Sabon-gari market who travels to buy commodities in Lagos and Aba, said the fuel subsidy removal added more financial burden on him amid the increase in transport fare and logistic costs.

“A pair of shoes we used to buy at N3,500 in Aba will now be sold at N6,000 when you add the cost of transportation from Kano to Abia state. Before now, we were paying N13,000 from Kano to Aba, but now I was told it increased to N18,000 per person, not to mention the luggage cost. I feel bad about the subsidy removal because it will affect my daily living,” he said.

Although the queues have disappeared at filling stations in the city, fares for intrastate and interstate commuting increased significantly as pump prices shot up to N540 per litre. Meanwhile, PREMIUM TIMES found that Kano Line Transportation hiked its fares on various routes across northern Nigerian cities amid uncertainties over the petroleum subsidy removal.

On Thursday, in a circular approved by its Director of Finance, Sani Dan-Abdul, the agency announced the increment in transportation fares in line with “market realities”.

The fare from Kano to Abuja was increased from N3,500 to N5,000, while Borno moved from N4,000 to N5,500, Adamawa from 5,000 to N7,000, Taraba from N6,000 to N8,000, Gombe from N3,000 to N4,500, Bauchi from N2000 to N3,000, Niger from N4,000 to N5,500, Benue from N7000 to N8,000, and Nasarawa from N5,000 to N7,000.

Though Kano Line motor parks host government-owned vehicles, mostly buses, other privately owned vehicles operate in the parks at a higher price than the government fixed price.

Katsina

In the Katsina metropolis, a PREMIUM TIMES reporter found that the increase in fuel price impacted economic activities.

Although the state government directed the State Transport Authority (KSTA) not to increase fares, commercial motor parks in the state have raised transportation fares by at least N1000.

When this reporter visited the NARTO park Sunday evening, there were few passengers and motorists. “This is even better because if you had arrived early, you wouldn’t have seen more than five vehicles in the queue. Because the fuel is now expensive, we added money to the fare, and it’s making commuters afraid to even come to the park,” Halliru Labo, a park official, told PREMIUM TIMES.

This newspaper learnt that transport fares from Katsina to Gusau (Zamfara), which stood at N3,000 before the increment shot up to N4,000, while Katsina to Dutsin Ma rose from N500 to N900. Katsina to Kano by bus increased from N1,500 to N2,500.

Apart from transport, business owners and service providers in the metropolis also lamented the impact of the pump price increase. A car mechanic around GRA Jumuat mosque, Abdussalam Sani, said the number of people coming to the mechanic workshop for maintenance has reduced.

“When you look at the site where some of my staff repair car air conditioning system, it’s almost empty because people no longer use A.C. in their vehicles. The number of people using cars and even motorcycles has reduced,” Mr Sani said.

Ahmed Dida, a barber at VIP Barbing Saloon in Katsina metropolis, said: “We’re running on generating set, and we have to buy fuel at N560 per litre. Even if it’s only one customer that may not give you N500, you’ll need to put on the generator. So, it’s affecting us because, at the end of every business day, we mostly end up without even the money to buy fuel.”

Ekiti

Residents of Ekiti complained about the increase in transport fares, the prices of food commodities and other essential goods.

Nkiruka Romanus, a foodstuffs seller at Olojudo market, Ido Ekiti, said a 50kg bag of a short grain of foreign rice sold between N34,000 and N35,000 some weeks back is now selling for N37,000. Mrs Romanus explained that the price increase resulted from the rise in transportation fares after the removal of the petroleum subsidy.

Kemi Ogundare, a frozen food seller in the same market, said a carton of frozen fish had only increased slightly, but she anticipated that in the coming week, there might be a further rise in price.

Idowu Akinola, on her part, said: “The cost of transportation due to the fuel subsidy removal was the reason for the high cost of most foodstuffs in the market now.”

Some traders at the market also lamented the low turnout of customers.

Bimbo Ogunsina, a foodstuffs seller, said, “Since the beginning of this problem called subsidy, things have never remained the same. There is a meagre turnout of customers compared to before. It’s like people are now trying to manage their income.”

A civil servant, Kennedy Okeke, said that the removal of the subsidy that led to the increase in the pump price of petroleum affected his transportation budget for the week.

“I used to budget at least N5,000 every week as transportation fare. But could you believe that the N5,000 doesn’t even last me for just three days due to the higher cost of fuel that affects transportation fares,” he said.

Uyo

In Uyo, the Akwa Ibom State capital, residents lamented the surging price of essential commodities and transportation fares in the city.

When PREMIUM TIMES visited the famous Akwa IbomTransport Company Park located at Itam Industrial Layout, a new price regime had emerged. For instance, the transport fare from Uyo to Aba increased from N1500 to N2100, while the fare for Uyo to Calabar increased from N3100 to N4,500.

For northern states like Kaduna and Jos, the fares increased from N17,000 to N22,000, representing a 29.4 per cent hike.

Enwongo Ikot, an Electrical Engineering student at the University of Uyo, also lamented the fuel price hike and its effect on transport fares. According to him, transport fares from the Town Campus, located along Ikot Ekpene Road, to the institution’s main campus, located along Nwaniba Road, have increased from N80 to N150.

Also affected by the petrol price hike are the prices of commodities in the market.

Otobong KenJoshua, who runs a shop in Afaha Ube, told PREMIUM TIMES the condition is worsened by the current power outage in the city. According to her, crayfish, a major ingredient for soup making, is now sold at N130,000 a bag as against N85, 000 what it was before the fuel price increase.

“They’ve added money to almost everything. Rice used to be N35,000 but now is N40,000 for a 50 kg bag,” she said.

For about a week, residents of Uyo have had to cope with power blackouts, but the hike in fuel prices has further worsened the situation. “More businesses that run on fuel are planning to shut down for a while and wait for the restoration of power supply,” Mrs KenJoshua said.

To cope with the condition, Mrs Kenjoshua said she has reduced the quantity of perishables she buys and concentrates more on dry foods.

Enugu

A commercial driver in Enugu, Arinze Nwachukwu, said the subsidy removal policy affected their earnings drastically.

Mr Nwachukwu said since the subsidy removal was effected, he would return from a trip only to realise that he had spent nearly the whole money he made from passengers on buying fuel even as attempts by some drivers to increase the fares forced a drop in patronage.

“Passengers are no longer coming. Look at our park. It is empty,” he lamented.

A petty trader in Enugu, Okey Ugwuja, said the impact of the subsidy removal on his business had been minimal mainly because he was yet to make new purchases which would make him spend on transportation.

“But if this should continue, it will affect everyone because prices of commodities and other things will increase more,” he said.

Iruka Igwe, another commercial driver, lamented that he used to charge passengers N5000 to convey them from Enugu to Abuja, Nigeria’s capital. But after the subsidy removal, he and others were forced to increase the charge to N8,500. But since then, he said, patronage dropped.

Charles Anigbo, who sells clothes at Ogbete Main Market, lamented the impact of the subsidy removal on businesses. “It affects us because movements have been restricted due to the high cost of fuel, which pushed the cost of transportation. And you know movements help business to thrive,’ he said.

Subsidy

Nigeria has spent trillions of naira on petrol subsidy in recent years, more than it spent on healthcare, education and key areas of human capital development.

Experts and global development organisations have warned against the policy and its effect on Nigeria’s fiscal sustainability.

This year, the immediate past government only provided budgetary allocation for petrol subsidy until 30 June, after saying it would leave the incoming administration to make a final decision on the matter.

Opponents of the removal have, however, argued that it would increase the prices of goods and services and further impoverish millions of citizens.

The Nigeria Labour Congress (NLC) and other labour unions have threatened to protest the government’s decision on Wednesday. ( Premium Times)

 

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