April 15, 2024

19.6% inflation: Nigerians lament as soaring energy prices deplete earnings

Samuel Agbelusi

The Nigeria’s inflation rate with its horrifying all-high 19.64 percent in July, the highest since 2005, has left many Nigerians poorer, as they battle with soaring energy bills.

Some middle-class and lower-paid, in conversation with EnergyDay at the weekend, bemoaned the effects of cost-of-living on their daily lives. They revealed that rising prices of basic amenities including transportation, electricity tariff, fuel, and cooking gas have eroded their purchasing power.

Recall that Nigeria’s inflation figure recently released by the NBS recorded over 100 basis points above June’s inflation, which was 18.6 percent, defiling industry experts’ predictions.

Prince Semiu Adeniran, statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS), recently revealed that the increase in inflation was fueled by an increase in the cost of transportation arising from the higher cost of energy.

EnergyDay’s check showed that the persistent increase in the prices of goods and services across the country has resulted in the declining purchasing power of most Nigerian with a debilitating effect on their earnings.

 

DIESEL

Mr. Akinsoyinu Ahmed, a printer consultant in Ondo State said revealed to our correspondent that, apart from his operational earnings have greatly reduced on account of the amount he spends on diesel and electricity. This according to him is beside the rising cost of printing materials and operating services.

Ahmed, said, “it is increasingly difficult quoting for jobs for most clients, as some of them have been turning down offers due to exorbitant prices.

“We use diesel generators for operations dues to the unreliable power supply. This has really affected the cost of our operation. Diesel is now sold for over N800 per liter, from N200 and N220, within a year.

The printer however called on the government to find a way to remedy the impact of inflation on small business owners, lamenting that things are tough for most Nigerians.

Mrs. Mary, who owns a fairly large cold room business in Benin City, Edo State, disclosed that the hike in fuel prices which has been passed on the products has reduced patronage by customers.

She expressed, “I operate in a mall that is powered by the generator almost every day, because of poor power supply. All outlets in the mall now pay higher than what we used to contribute to refueling the generating set. I pay as high as N5,000 from N1000.

Bodunde Bayo, who operates a factory in Abeokuta, said he has closed his business due to the high cost of diesel.

“We can’t afford diesel and high taxes charged by the state and local government. More than 20 factories operating within my clusters have partially shut operations. I sold three of my generators and bought a taxi cab instead to survive.” he said.

Bayo revealed that the rising cost of diesel has affected most businesses. I bought diesel at N300 per litre in January, but this has skyrocketed to N800 per liter,” he said

 

ELECTRICITY TARRIFF HIKE

The management of Sunshine Garden Estate, Akure, Ondo, in a circular addressed to the residents of the estate, seen by EnergyDay, that the energy cost has increased in view of the price of diesel and electricity tariff by the Benin Electricity Distribution Company(BEDC) .

The statement said, “Sequel to the engagements with the estate’s executive committee in regards to the need for an increase in cost of power tariff, the management would be increasing the electricity tariff to N170 (all inclusive) rate per kilowatt hour.

“The current tariff of N87 was computed in August2021 when the price of diesel was at about N300 per litre and BEDC tariff was at N52.81 (Vat exclusive).

“ However, BEDC has increased tariff per kilowatt from N52.81 to N64.81 (Vat exclusive) and the cost of diesel today has skyrocketed from N300 per litre in August, 2021 to N750 per litre,” the letter stated.

For Mrs. Shola Akinpelumi, who lives in a residential apartment, told our correspondent that she has cut consumption on electricity usage due to the new cost-reflective tariff charged by DisCo.

She said, “I have cut down on the usage of air conditioner (AC) and other electrical appliance that consumes energy due to the increase in electricity tariff. I can no longer continue to incur more cost, because my salary has remained the same.

Mr Daniel Emeka, a resident at Akute, Ogun State, who noted that the hike in electricity tariff has made things difficult for him despite using prepaid metres.

He said, “I used a prepaid meter but the cost of recharging is unbearable as it keeps increasing all the time. Before now I recharge at the rate of N47 per kilowatt but now it has increased to N64 per kilowatt and I am still not fiding it easy with the new rate.”

Emeka noted that the tariff and inflation rate has affected the way he operate his business and lifestyle.

 

COOKING GAS

Mrs Rasheedat Akinola, a petty trader at the Ojodu Berger area of Lagos State, coping with the constantly increasing cooking gas prices is becoming unbearable for her and her family.

Her husband, Mr. James Akinola, is a business man whose earnings are not even enough to take care of them. He gives her a monthly upkeep of N50,000 which she manages to put food for the family.

“I am even tired of cutting costs because each time you go to buy things at the market, you would notice that the price you bought last week is not the same price it would be sold this week,” she lamented.

She added “My family can’t afford the continued increase in cooking gas price. So, I try to use firewoods at times to make food which is inconvenient and make sure I manage it because we don’t make as much money as we used to. Times are hard. One kg of gas, which we used to buy for as low as N350 per litre in 2020, is now as high as N750. I’ve never witnessed this kind of hardship in my entire life until recently,” she added.

Speaking with Energyday, Mrs Juliet Fayeun, a teacher in Ogun state said the skyrocketing cooking gas prices were affecting her family negatively.

Narrating her ordeal, she said her six-member family now rationed their gas usage due to high prices.

“Unfortunately for my family, from 2021 till today, our salary can’t even feed us enough. Instead, we experience this hardship that comes with a high cost of living. Prices of food are hitting us hard, and gas is not helping matters at all.

In August 2021, I filled a 12.5kg cylinder for N11, 000 and the price is still increasing because it’s now N13, 500. Where are we going in this country for God’s sake? I don’t blame those running away to better economies,” she said

The Central Bank of Nigeria (CBN) in a recent report,  attributed the rising inflation rate to a combination of persisting issues including high food and energy prices, supply chain disruptions associated with the impact of sanctions against Russia, exchange rate pressure, capital flow reversals, as well as underlying legacy constraints.