27-year-old tech brother Josiah Sinebe doesn’t mind moving back in with his parents. It’s a perk that comes with working a remote tech job. That advantage has proven useful with the current rise in fuel prices in Nigeria. “In recent weeks I have spent more than double what I would previously spend on the same amount of fuel,” he said. “It was significant for my finances. That is how I remembered that I am still a child and that I have parents who love me.”
For the more than 200 million people living in Nigeria, the elimination of fuel subsidies in Nigeria has a significant impact on their living conditions. Fuel prices have risen astronomically by more than 160 percent, leading to higher transportation costs, including public transportation. Bus fares, taxi fares and other forms of transportation costs have increased, making it more expensive for individuals to commute to work, school or access essential services. This particularly affects low-income people who rely on public transportation as their primary mode of commuting. This is now having ripple effects on the prices of goods and services in various sectors of the economy, including food, transport and utilities. In recent weeks Mr. Tyberus has had to spend more money on his transport budget. “I only embark on long journeys that require me to spend money only when it is important,” he said.
As transportation costs rise, companies pass on these higher costs to consumers, leading to an increase in the prices of goods and services. Bread and other staple foods have increased by 10 percent or more in recent days, while some readily available and readily available products are no longer available or are becoming expensive to afford. The rise has contributed to the country’s steadily rising inflation. Last month, inflation rose to a new 17-year high of 22.41 percent, from 22.22 percent in the previous month. Analysts predict that inflation could reach 30 percent by the end of June and July, due to the effect of the elimination of subsidies.
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For Mr. Tyberus, spending on transportation has meant he has to cut back on other areas, such as food. “Due to the rising cost of living, the reduction in disposable income, with inflation rising monthly, there is a greater inability to meet financial expectations, and this results in loss of confidence, depression and a sense of hopelessness” , said economists. and financial analysts, Adeola Ogunbodede.
A wave of companies has revised their prices in response to higher operating costs. Two weeks ago, Bolt rated are pricing in Nigeria to accommodate higher operating costs for drivers on its platforms. The ride-hailing company increased the minimum fare for a trip to ₦800, up from the previous ₦650. Shuttlers, a logistics technology company that is empowering employers to transform their approach to workforce transportation, is to help employers cushion the effect of eliminating subsidies on workers by creating a system that allows them to buy seats instead of buses, subsidizing transportation costs for them.
Despite these changes, drivers and taxi drivers’ unions have remained dissatisfied with these new prices, saying it still doesn’t cover their costs. According to a report van Punch asked the Amalgamated Union of App-Based Transport Workers of Nigeria ride-hailing companies to raise rates by at least 200% and set a minimum rate of ₦2000. As considerate as this request may seem, the consequences of such a sweeping change will undoubtedly be detrimental to all concerned. Bolt, for example, has stated that it is wary of reduced patronage if fare prices are too high. “Taking into account the question of supply and demand, we understand that excessively high prices can not only discourage passengers, but also affect the availability of drivers on our platform, as well as negatively impact their revenues. That’s why our revised fares aim to strike a balance that prioritizes the well-being of our passengers and drivers,” the company said in a statement.
When colleagues Sharon Areola and Esther Victor went to the bus stop after a long day of work, they didn’t expect the bus fare to be more than they budgeted for. “We used to pay 300 naira for the distance. But after the fuel price increase, it became 500. So we had adjusted our transportation budget to that change,” Sharon said. Unfortunately, the few buses that arrived at the bus stop that day quoted 700 naira as the fare. “We could spare 100 more, but here they added 200 more naira to the price.” As more people continued to flood the bus stop and fewer buses came, they knew that if they wanted to get home before dark, they had to move quickly. Finally, the two moved to the next bus stop to bridge the 100 naira difference.