The Nigeria Labour Congress (NLC) has issued a stern call for the Nigerian government to urgently reverse the latest increase in petrol prices, marking the third hike in less than a year. The rising cost of fuel continues to compound the economic pressures faced by citizens, igniting further frustration across the country. With inflation and unemployment rates climbing, the NLC has emphasized that these price adjustments are exacerbating poverty and hardship for millions of Nigerians.

In a statement, NLC President Joe Ajaero expressed deep dissatisfaction with the government’s handling of the economic situation, describing the recent fuel hike as “unproductive” and one that has failed to generate positive outcomes. “The previous increases have produced no good result,” Ajaero remarked. “Instead, people are getting poorer.” He also criticized the government’s reliance on short-term measures and called for a comprehensive strategy to address the economic challenges, rather than “scattered palliative policies.”

NNPC’s Price Adjustments and Their Impact

This latest price hike, enforced by the Nigerian National Petroleum Company Limited (NNPCL), has seen fuel prices soar at filling stations nationwide. In Lagos, Nigeria’s bustling commercial hub, and in Abuja, the Federal Capital Territory, the cost of petrol has risen to ₦998 and ₦1,030 per liter, respectively. This marks a significant increase from the previous prices of ₦897 per liter, further burdening Nigerians already grappling with high inflation, a weakened naira, and rising living costs.

The NNPCL has remained silent on the reasoning behind this latest adjustment, which comes just a month after a similar price hike in September 2024. At that time, NNPC released estimates for the price of petrol across different states, reflecting an already steep rise. The estimated pump prices, which ranged from ₦950 to ₦1,200 per liter, were attributed to the pricing model based on supply from the Dangote Refinery, Nigeria’s largest refinery. Despite the refinery’s commencement of fuel loading, prices have only continued to climb.

This third price hike since January 2024 has raised questions about the sustainability of the current pricing mechanism and the government’s role in regulating fuel costs. With fuel prices fluctuating frequently and unpredictably, citizens are bearing the brunt of increased transportation costs, higher food prices, and a general decline in purchasing power.

Dangote Refinery’s Role and Expectations

When the Dangote Refinery began operations in mid-2024, there was widespread hope that it would stabilize Nigeria’s fuel market, reduce the need for expensive imports, and ultimately bring down petrol prices. As one of the largest refineries in Africa, with a refining capacity of 650,000 barrels per day, the refinery was expected to supply a significant portion of Nigeria’s fuel demand.

However, the refinery’s entry into the market has not yet yielded the anticipated relief. Instead, the price adjustments in September and October have indicated that fuel costs remain volatile, largely influenced by global oil price fluctuations, operational challenges, and supply chain constraints. The government’s dependence on the Dangote Refinery to drive down prices now seems overly optimistic, especially given the rising cost of crude oil and international market pressures.

The NLC has highlighted this issue, stressing the need for a more holistic economic plan. Ajaero pointed out that while the refinery’s output is crucial for reducing Nigeria’s dependency on fuel imports, the government’s focus should extend beyond short-term gains and concentrate on longer-term economic development strategies.

Economic Struggles and Policy Criticism

Nigeria is currently facing one of its most challenging economic periods in decades. The inflation rate, which has hovered above 20% since early 2023, has eroded the real incomes of citizens. Coupled with a high unemployment rate of over 33%, the rising cost of living is pushing more Nigerians into poverty. According to the World Bank, approximately 40% of the population lives below the poverty line, and this figure is expected to rise if economic conditions do not improve.

In light of these challenges, the NLC has criticized the government’s handling of the economy, particularly its reliance on fuel price increases and other austerity measures. The union has called for a reversal of the fuel price hike and urged the government to develop a comprehensive economic plan that focuses on job creation, infrastructure development, and industrialization.

“The government must go back to the drawing board and bring out a proper plan for economic growth and national development,” Ajaero said. “What we are seeing now are scattered palliative policies that do not address the root causes of our economic problems.”

Public Backlash and Social Unrest

The latest price hike has triggered widespread discontent among citizens, many of whom have taken to social media to express their frustrations. The increase has also led to a resurgence of protests in major cities, with labor unions and civil society groups mobilizing against the government’s policies.

Several organizations have warned that if the government does not take swift action to address the rising cost of living, the country could see an escalation of social unrest. The fuel price increases, coupled with the removal of fuel subsidies earlier in the year, have left many Nigerians feeling abandoned by the government. The removal of subsidies was initially seen as a necessary step to reduce the fiscal deficit, but its implementation has been widely criticized for lacking adequate social protections for the most vulnerable populations.

The government, in response, has implemented a series of palliative measures, including cash transfers and food distribution programs. However, these efforts have been criticized as insufficient and poorly targeted. Many Nigerians report not receiving any of the promised support, while others argue that the assistance provided does not cover the rising costs they face daily.

Political Ramifications

The ongoing fuel price hikes have not only sparked public outrage but have also become a major political issue for the administration of President Bola Tinubu. With presidential elections scheduled for 2027, the government’s economic management is likely to be a central issue in the campaign. Opposition parties have already begun criticizing the administration for its handling of the economy, particularly its approach to fuel pricing and subsidy removal.

Some analysts suggest that the government may be forced to reconsider its fuel pricing strategy in the coming months, especially as public pressure mounts. “The government is walking a tightrope between fiscal responsibility and social stability,” said political analyst Taiwo Akintoye. “If they continue down this path without offering meaningful relief to citizens, it could have serious political consequences.”

Looking Ahead: What Can Be Done?

As Nigerians grapple with the third fuel price hike in a year, there is a growing consensus that the country needs more than just temporary fixes. Economic experts and labor unions alike are calling for structural reforms that will address the root causes of Nigeria’s economic challenges.

One key area of focus is the need to diversify the economy away from its heavy reliance on oil. While oil remains Nigeria’s primary export and a major source of government revenue, fluctuations in global oil prices continue to have a disproportionate impact on the domestic economy. Developing other sectors, such as agriculture, manufacturing, and technology, could help insulate the economy from oil price shocks and create more sustainable growth.

In the short term, however, the NLC and other groups are pushing for immediate relief for citizens. This includes not only a reversal of the fuel price hike but also a broader review of government policies to ensure they are aligned with the needs of the population.

“The government must listen to the people,” Ajaero said. “We cannot continue on this path of increasing fuel prices while ignoring the suffering of ordinary Nigerians.”

The coming weeks will be critical for the government as it navigates the economic and political fallout from the latest fuel price hike. Whether it chooses to reverse course or stay the current path, one thing is clear: the decisions made now will have lasting implications for Nigeria’s future.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

10th October, 2024