Inflation Challenges Nigeria’s Economy: Affects Energy Costs and Others

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Nigeria faced economic challenges in 2023, with a sharp rise in inflation to 28.9% and soaring energy costs. President Bola Tinubu’s fuel subsidy removal announcement in May led to a significant increase in petrol prices, reaching as high as N637 per litre. This surge affected the passenger transport and haulage business, causing interstate transportation fares to skyrocket by over 100% in June, reaching between N26,000 and N33,500.

During the peak Christmas travel season in December, fares rose even higher, prompting the Federal Government to step in. The government slashed interstate transport fares by 50% and offered free train rides from December 21, 2023, to January 4, 2024, to alleviate the financial burden on travelers.

The impact of these changes extended beyond passenger transport, affecting importers as well. Importers faced increased costs to move containers from seaports to warehouses due to rising diesel prices. The cost of transportation became a significant factor for market dealers, influencing the prices of commodities.

Truckers, in particular, struggled as they had to buy diesel at N1,300/litre, making it challenging for them to cover their expenses. These economic hurdles underscored the interconnected nature of transportation costs and their cascading effects on various sectors.

Source: BUSINESS DAY

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