The rumour that that the federal government of Nigeria is planning another fuel price hike is indeed a ‘joke taken too far’. The fact the the government has finally allayed the fears of the public also speaks volume.
The Petroleum Products Pricing Regulatory Agency, PPPRA has dismissed the opinion expressed by the forum of former Group Managing Directors of the NNPC. While such opinion might have substance when weighted against its rationale, it is counter-productive given the times we are in.
Nigerians and Nigeria cannot survive another fuel price hike without a serious damage to the social fabric of the country. Inflation is already at 17.25% from 16.75% in June. The Central Bank Nigeria, CBN has already increased interest rate in July from 12% to 14%.
While this is a matter of using ‘one stone to kill two birds’ which implies the CBN also wants to make the country attractive to foreign investors; the effect of this is that domestic borrowing is now harder than ever.
This is a big blow to small and medium scale businesses who needs short term liquidity to survive.
The massive job loss has also increased the number of dependents in the country. While the banking sector made a supposed promise with the minister of labour, Dr. Chris Ngige that they will place a moratorium on layoffs. Yet, Zenith Bank PLC, Nigeria’s second largest bank was reported to have laid off about 1,200 people last Friday.
Food prices have also gone south. A major additive to Nigeria’s skyrocketing inflation remains staple foods that Nigerians cannot afford not to buy.
Therefore, another increase in fuel price will further destroy the economy sending inflation to nearly 25% to 30%. The opinion expressed by the former managing directors are not introspective and irresponsible not to say the least.
President Buhari has seen the handwriting on the wall that he will be risking the final ounce of goodwill he has left if he should yield to such reckless advise.