Read the harm fuel price increase, electricity tariff hike are doing to Nigerians
The year 2020 has never been an eventful one for many Nigerians. The government on its part has not been helpful. While a few Nigerians, especially those in the corridor of power, are riding on the back of government sponsored commodities, the masses are in the throes of woes. Prices of consumables are daily increasing while the government on its part is adding to the pains of the poor masses following its consistent increase in the price of commodities.
While many are struggling to come out of the impact of the lockdown occasioned by the COVID-19 pandemic, the federal government in September imposed an increase in the price of fuel, hike electricity tariff just as the price of food stuff has continued to rise to roof tops. Nigerians were on lockdown for over three months without engaging in any profit-yielding business venture.
As the lockdown gave way, a government pronouncement of fuel price hike greeted the nation, a development which affected all sectors and drowned the hope of many businesses resurrecting from the lockdown. As a hotelier, Euguene Okwuchi, puts it, ‘it is like we are still in lockdown because as the economy was gradually waking from the effect of the lockdown, the federal government slammed the nation with fuel price hike.” Mr. Okwuchi is the General Manager of Jojesil hotel in Asaba, the Delta state capital.
The fuel price hike and increase in electricity tariff have not aided the economic life of Nigerian people. For the domestic consumer, the transporter and the industrial sector, the increase in price of fuel means a lot. The increase in the price of fuel is automatic increase in transport fare whether intercity or intra-city transport. An economic expert gave an analysis on the likely effect of the increase of the price of fuel on the Nigerian economy.
In an article, Morenike Comfort identified five important areas where the fuel price increase will hit the Nigerian economy hard. According to her, most-poverty inducing strategy is increase in fuel price because the 200million people in Nigeria depend entirely on private road travels as there is no established public mass transit. Yes, in Nigeria there is no established public transport in the country. All the thriving transport systems are private driven and with the increase in the rice of fuel, prices of road transport are bound to move up.
She also said 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, and now it will be increased again, times two and the populace will bear the brunt. For her,this is no good news for the poor Nigerians.
The entire food chain from the farmer to the consumer is by road; so there will be increases in cost of food due to increase in cost of transportation. That is how it works, she explained. As the cost of transportation increases, it is built in the final product and the consumer, being the last chain in the production process, bears the burden. A product formerly sold for N1000 can now go for either N1300 or N1400. This is so because the wholesaler and retailer are out for profit.
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.
The manufacturing sector in Nigeria 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 which 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.
Mr. Okwuchi, General Manager of Jojesil Hotel, is one of the business operators who is not pleased with the fuel price hike in the country. He said that the increase in fuel price is hitting hard on the hospitality industry “We have just come out of the COVID-19 lockdown, the effect is everywhere. Rather than allow the economy to bounce back, the federal government announced a fuel price increase. This is not funny at all. Many hotels do not have guests as it was prior to the lockdown and we must supply light 24 hours for the few available ones. Whether the guests are many or not, the light must run. So, the increase in the price of fuel is terribly hitting us hard.”
He explained that despite the challenges in the industry at the moment, officials of BEDC have always given them higher tariffs to pay. “They don’t care whether we are making profit or not. What they know is that at the end of the month, they bring their bills. This is affecting both the hotel owners and the workers, because some times we find it difficult to receive our salaries. You know without the customers, there can’t be money to pay our workers.”
Mr. Okwuchi faulted the electricity distribution company on one major issue. He said: “There are times we don’t have power supply. Some times last week, we ran our generator for four days non-stop. But at the end of the month, the tariff will not reduce. The amount is still the same despite we didn’t consume electricity for some days. This is wrong. Government should look into this increase and make some considerations because we are just coming out of lockdown.”
He said that for the industry to survive the lockdown era, many hospitality outings had to lay off some staff so as to remain afloat. “We retrenched some of our staff in order to be able to manage the system. But despite all these, all is not well. Things are not working the way they ought to work,” Okwuchi noted.
He explained that hospitality business is one of the most lucrative business outfits in Nigeria. This, according to him, is the principal reason hotels are springing up everywhere in the state capital. He said: “Outside government job, hospitality business is the next in the state. It is employing many of our youths. They are using it to take care of themselves. Its been helpful to them.”
Chukwurah Ofone, vice chairman of Kwale park along Ibusa road in Asaba, is also an unhappy man with the situation in the country. He expressed displeasure over the fuel price hike to The Pointer who visited him at the park on Thursday. Chukwurah said since the directive from the state government for them to carry only five passengers per trip, the directive has not changed and the transporters have been complying. From Asaba to Kwale and Ozoro, passengers are made to pay N1000 and from Asaba to Ughelli, they pay N1500. This was during the heat of the COVID-19 pandemic.
Ofone said: “Despite the increment in the price of fuel, we are still made to carry only five per Sienna trip. We try to increase the fare but it is not working. Just imagine the situation we find ourselves. Drivers are complaining. Five passengers with high cost of fuel is not a joke for us. But there is nothing we can do about it. We have to cope with it. And at the end of the day, some go home with N1000, some N500.”
He said authorities of the road transport in the state have spoken much about it but it has not yielded any fruitful results. According to him: “The government is not listening to us. They take decisions the way they like. I will advise the government to look into this matter because it is affecting everybody.”
Rather than increase transport fare, Ofone said “We are even reducing the price for passengers despite the price of fuel is high. There is no movement. People are not traveling. Most of the passengers do not even have the money. You tell them Ozoro is N1300, they will tell you N1000. What will you do? After much argument, you discover that time is running out, you will comply and carry them.
“Most of them prefer going to the roadside for cheaper fares, because there is no money. Till now we are still carrying the number recommended to us by the government. For Sienna, it’s two back, two middle and one front, just five passengers. This is despite the fuel price hike. Though drivers are complaining seriously, there is no employment anywhere, anything you hold, hold it seriously.”
When asked on how they cope with their families, Ofone said: “Everybody knows how they sort themselves out. I have my own family, everybody has theirs. Most of them struggle to for two trips, everybody is complaining of school fees. We don’t have schools of our own. People are just coming from lockdown and the government is greeting them with fuel price increase. The thing is not a good one. We beg passengers to enter bus for N1000. People are not travelling again. Many people prefer the roadside to joining the park. We tell them N1000, some say they have only N800, we encourage our drivers to carry them.”
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