The Impact of Fuel Price Hike on Private Car Owners in Nigeria

In recent weeks, the economic landscape of Nigeria has been further strained by the removal of fuel subsidies and the subsequent increase in the price of Premium Motor Spirit (petrol). The Nigerian National Petroleum Company Limited (NNPCL) lifted petrol prices from N897 to N1,030 per litre, significantly intensifying financial challenges for citizens already grappling with a high cost of living.

This latest price hike is poised to escalate poverty levels across the nation, as experts warn of its potential to push more individuals into financial distress. With fuel prices surging by an average of 174.6 percent, the ramifications of this decision are felt throughout various sectors of the economy. The removal of subsidies, coupled with currency depreciation, has contributed to a skyward trajectory in the prices of goods and services.

Data from the National Bureau of Statistics highlights the gravity of the situation, revealing that Nigeria’s inflation rate soared to 33.95 percent, with core contributors including transportation and fuel costs. Daily necessities have become increasingly unaffordable, with reports indicating soaring prices for staple items such as rice, which now exceeds N100,000 per bag.

In response to these economic pressures, many private car owners are resorting to converting their vehicles into commercial services. This practice allows them to offset rising fuel costs by charging passengers for transportation, thereby recouping some of their expenses. For instance, Akinolu Olu, a resident of Lugbe who commutes to work in Utako, Abuja, shared how he now charges his neighbors for rides—a stark contrast to his previous practice of offering free transport.

“Before the fuel subsidy removal, I used to transport four of my neighbors without charging them. However, since the price increased, I now charge N700 per person for each trip,” Olu explained.

As this trend of informal commercial driving continues to gain traction, it underscores the urgent need for government intervention to alleviate the financial strain on households. Citizens and economists alike are calling for measures to mitigate the economic hardships that have become all too commonplace in Nigeria, emphasizing the importance of addressing the escalating cost of living crisis.