ABIODUN MARTINS OKE
Thehardshipexperienced by Nigerians in the last one year cannot be forgotten in a hurry owing to the removal of fuelsubsidy by the Federal Government.
Recall that President Ahmed Bola Tinubu on May 29th, 2023, the day of his inauguration as the newly elected president of the Federal Republic of Nigeria made a pronouncement that “fuelsubsidy is gone” while addressing the nation shortly after taking the oath of office.
The president’s action sparked reaction from citizens. To some, the action was a welcome development that would help the nation in building a non-monopolist oil market in Nigeria.
Contrary to this opinion, some saw it as a way of making life difficult and unbearable for the average Nigerians owing to the fact that the removal of fuel subsidywould lead to increase in pump price of fuel which would amount to increase in the market price of goods and services.
The Federal Government assured the citizens of prompt action, noting that the pain being experienced by Nigeriansover would be temporary.
On August 1, 2023, President Tinubu, in a nationwide broadcast revealed that the Federal Government had saved N1trn in the two months (June and July) since theremoval of the petrol subsidy.
The Federal Government also stated that the money had been given to state governors to help cushion the effect of subsidy removal. This according to government was evident in terms of allocation received by state Governors in previous months.
The subsidy removal by the Federal Government led to the increase in price of petroleum products. Not only increase in pump price but Nigerians also witnessed scarcity of the product amidst high cost of pump price.
According to a monthly report from the Nigeria Bureau of Statistics (NBC), an average retail price paid by consumers for Premium Motor Spirit (PMS) also known as petrol, in the month of April 2024 was N701.24, this indicated 176.02 percent increase when compared to the value recorded in April 2023, which was N254.06.
Automotive Gas oil (Diesel) rose from N654.48 recorded in April 2023 to N842.25 per litre, an increase of 28.69 percent. Household kerosene (HHK) stood at N1,439.64 in April 2024, showing an increase of 6.29 percent compared to N1,354.40 recorded in March 2024 while the price of refilling a 5kg cylinder of Liquefied Petroleum Gas (cooking gas) declined by 1.06 percent on a month-to-month basis from N6,521.58 recorded in March 2024 to N6,521.58 in April 2024.
Amidst this high price of fuel, scarcity of petrol hit Nigeria in April 2024 when motorist queued for hours to buy fuel. The scarcity led to increase in pump price of petrol in many parts of the country where the price rose to an average of N950 per litre.
The transportation sector is not exempted. The cost of transporting people and goods is quite alarming due to inflation on market price. A journey which is less than two kilometers is charged N500. The passengers and other road users are complaining about the enormous amount they’re being charged by motorists.
Motorists on the other hand attributed the high cost of transportation to high cost of petrol, spare parts and poor road network.
The Nigeria currency keeps depreciating against foreign currency on a daily basis. US dollar exchange rate has risen to a climax within a year. The average US dollar to Nigeria Naira exchange rate in 2024 is about one US dollar to N1,283.94 NigerianNaira, compared to Nigeria exchange rate against USD averaged N460.702 in May 2023.This has triggered inflation on importation of goods into the country.
It affected Nigerians so badly looking at cost of goods and services especially imported goods. Though government has closed boarders, goods are still being imported into the country.
Nigerians have witnessed high level of hunger ravaging in the country. It has become a difficult situation for an average Nigerian to afford one meal not to talk of three square meals per day. The skyrocketed price of food items is so enormous compared to previous years.
National Bureau of Statistics (NBC), reported that price of rice, garri, tomatoes, beans, yam and other food items increased in April 2024. NBC stated this in its selected food prices watch for April 2024.
According to the report, the average price of 1kg of local rice increased by 155.93 percent from N546.76 recorded in April 2023 to N1,399.34 in April 2024.1kg of white garri increased by 134.98 percent on a year on year basis from N362.50 recorded in April 2023 to N851.81 in April 2024. 1kg of brown beans increased by 12.44 percent from N1,234.40 recorded in March 2024 to N1,387.90 in April 2024.
In addition, the average price of 1kg of yam tuber rose by 154.19 percent on a year on year basis from the N444.69 recorded in April 2023 to N1130.37 in April 2024. Other food items like palm oil, vegetable oil have also increased in price.
On 29th of May 2023, pump price of petrol rose to average of N550 in most filling stations in Anyigba community. Some filling stations ceased to dispense old stocks hoping to dispense as soon as new pump price was out. Market people were not exempted as they inflated the prices of their old stock.
Considering the economic effect of subsidy removal in an academic environment, Emmanuel said “the increase in fuel price as a result of fuel subsidy has led to high cost of living especially for students of Prince Abubakar Audu University (PAAU).” He emphasised on the increase in price of goods and services. “As we speak, a cup of rice that was sold for an average of N120 early last year, now sells for N250,”Emmanuel added.
Looking at the price of transport service within the campus Emmanuel stated that the cost has risen beyond capacity, “Now that pump price have increased the daily cost of living for students has also increased.
Reacting to the high cost of printing, a computer operator attributed the increase in service price to cost of petrol and other printing materials.
He said, “We as business owners, are not happy with the increase in cost of our services. The cost of A4 paper, toner, down to staple pin and other business materials have increase. Though customers especially students still patronize us but the expenses that we incur these days are more than before when we charged less.”
Speaking about the hardship caused by the fuel subsidy removal, a campus based commercial bike rider expressed dissatisfaction with the development.
He said “We are really affected by the removalof subsidy because price of things have increased. The cost of spare parts has increased as well.”
He noted that, the economic hardship has mage most of okada riders to be subjected to buying motorcycles on hire purchase which involves additional charges from the actual market price.