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Business News of Wednesday, 31 May 2023


Fuel subsidy removal causes transport costs to skyrocket in Lagos

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Nigerians are already suffering the effects of President Bola Tinubu’s statement on the removal of fuel subsidies. He made the statement on Monday, May 29, during his inauguration speech.

Many Lagos residents, who have been most affected by the development, have taken to social media to vent their frustration and disbelief after transport costs skyrocketed in a matter of hours.

Checks by Nairametrics show that many commuters in Lagos were stranded this morning as there were few commercial buses on the roads. This is because a lot of vehicles were in petrol queues across Lagos state.

Ridiculous price scenarios

Drop-off prices for the popular mobility app, Bolt, have increased and this has left many Nigerians frustrated.

As of Tuesday morning, May 30, 2023, Bolt was trending on Twitter as many Lagosians shared the ridiculously high Bolt prices they were charged, even for not-so-distant drop-off locations.

For instance, Bolt now charges between N5000 to N7000 per drop from Airport Road to Gbagada. Meanwhile, Maryland to Yaba now costs N3,300 to N4500. Meanwhile, Yaba to Obalende costs N8,650.

Also, Bolt is charging between N4,300 to N8,600 from Lekki Conservation Road to Obalende.

Some Lagosians have also claimed that Sienna vehicles are charging between N1,500 to N2000 from Oshodi to Lekki.

Meanwhile, danfo (yellow) buses that are active on the road are charging up to N1,500 per drop from Mowe to Berger and N300 per drop from Abule Oja to Oyigbo.

Also, some buses are charging N800 from Cele to Berger. Danfo buses also charge N700 from Yaba to Obalende.

A vicious cycle

Blessing Ohiowere, who spoke to Nairametrics, said the scenario playing out in Lagos is a dog-eat-dog situation. She said transporters are stuck at petrol stations, but those who spent the night hustling for fuel are on the roads, hiking prices.

According to her, market women and other traders on the road are also paying twice to transport their goods to open markets, where they will be charged twice as much by informal tax collectors, all because of fuel subsidy removal.

In turn, these traders will hike the cost of their goods, to make up for their expenses in transport and informal taxes, so, it’s a vicious cycle.

Does the president have a choice?

Oil and gas analyst, Kayode Oluwadare, told Nairametrics that for eight years, the Buhari administration did not put measures in place to ease the burden the masses will encounter when fuel subsidy is finally removed.

According to him, the buck now rests on the Tinubu administration which has no choice but to remove the fuel subsidy. However, it was expected that palliatives will be put in place to reduce the burden on Nigerians, before the announcement.

What you should know

This fallout could go on for weeks which could spiral out of control. Recall that in the past, petrol stations have shut down and hiked petrol prices, just to take advantage of customers.

Meanwhile, these erring stations have not truly suffered any consequences. This leaves the poor masses, who have no choice but to bear the brunt of actions stemming from ill-prepared policy statements from an unprepared government.