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By Dada Ahmed in Lokoja.
(C) Gelogia
Residents of Lokoja, the Kogi State capital, are grappling with a fresh wave of economic hardship following a sharp rise in petrol price to about ₦1,300 per litre, which has triggered a 25 per cent increase in transport fares across the state capital and its environs.
Drivers and commuters alike expressed frustration on Sunday as commercial operators adjusted fares upward to cope with soaring fuel costs, further squeezing already strained household incomes.
A survey of filling stations across the metropolis by our correspondent showed uniform pricing, with none dispensing fuel below ₦1,300 per litre in all the filling stations visited.
The immediate consequence was a ripple effect on urban mobility, as transporters shifted the burden to passengers.
For instance, the fare from the International Market to Zango by tricycle (popularly known as Keke NAPEP) rose from ₦600 to about ₦700 or more, depending on bargaining power.
Similar increments were observed on virtually all routes, underscoring how fuel price volatility directly dictates transportation costs in Nigeria’s largely road-dependent economy.
Economic observers link the sudden spike to tensions in the Middle East involving the United States, Israel and Iran, a conflict unfolding near the oil-rich Persian Gulf,one of the world’s most strategic energy corridors.
At the centre of concern is the Strait of Hormuz, through which roughly one-fifth of global oil supply passes daily.
Keen observers of international oil business regret that threats to shipping, attacks on vessels and heightened military activity have disrupted tanker movement and pushed insurance costs higher, triggering fears of supply shortages.
As a result, global crude prices surged from about $73 to over $100 per barrel within weeks, sending shockwaves through energy markets worldwide.
Despite being an oil-producing nation, Nigeria remains highly vulnerable to such external shocks because it still relies to some extent on imported refined petroleum products.
Analysts note that higher crude prices translate into increased import costs, stronger demand for foreign exchange and pressure on the naira, all of which culminate in higher pump prices.
The knock-on effects are already visible in Lokoja and other cities: rising transport fares, escalating food prices and worsening cost of living.
While government oil revenues may improve in the short term, economists warn that persistent energy shocks could deepen inflation, intensify social hardship and slow economic growth if global tensions continue.
To cushion the harmful impact of rising petrol prices triggered by the Middle East crisis, economic experts urged the federal government of Nigeria to prioritise boosting domestic fuel supply and stabilising the market.
This includes ensuring optimal production from local refineries , particularly the Dangote Refinery and rehabilitated state-owned plants,while guaranteeing transparent pricing and efficient distribution nationwide.
Strategic release from national fuel reserves, if available, and temporary reduction of taxes or levies on petrol imports could also help moderate pump prices and prevent panic-driven hikes.
In the short term, targeted relief measures are essential to protect citizens and businesses from the inflationary shock, according to financial experts such as Mal.Abdulkadir Mohammed and his professional colleagues.
They called on government to support public transportation systems through fuel subsidies for mass transit operators, expand rail and water transport where possible, and enhance provision of conditional cash transfers to vulnerable households.
Such interventions they added would reduce the burden on commuters, slow the rise in food prices and sustain economic activity, especially for low-income earners who spend a large share of their income on transport.
Mohammed stressed that over the medium to long term, the crisis underscores the urgent need for structural reforms in the energy sector of Nigeria.
He urged government to devote more efforts on diversifying energy sources, including compressed natural gas (CNG), electricity-powered mobility and renewable energy to reduce dependence on petrol and exposure to global oil shocks.
Strengthening the naira through sound fiscal and monetary policies, encouraging local refining, and investing in energy infrastructure will enhance resilience,he further suggested.
The expert explained that ultimately, building a self-sufficient and diversified energy economy remain the most sustainable way to shield Nigerians from recurring external crises,the energy.
Lokoja Transport Fares Surge 25% as Petrol Price Hits ₦1,300 per Litre
Drivers, commuters groan as petrol hits ₦1,300 per litre and transport fares jump by 25 per cent in Lokoja, Kogi State, north central Nigeria on Sunday.
Our correspondent who visited various filling stations in Lokoja on Sunday afternoon reports that no filling station sold less than N1,300 per litre.
Consequentially,the commercial drivers transferred the additional cost of fueling their vehicles to passengers as they increased transport fare by 25 per cent on all routes in the state capital.
Transport fare from the international market to Zango, hitherto by tricycle, popularly called kekenap,fixed at N 600 has gone up to N700 or more depending on negotiation between the drivers and passengers.
The development is feasible on all routes.
Investigation by The Reporters revealed that the increase in petrol price and the effect on transport fare is sequel to the current faceoff between US, Israel and Iran spanning two weeks now.
Energy and economic analysts note that the escalating crisis involving the United States, Israel and Iran has sent shockwaves through the global oil market because the conflict is centred in the Persian Gulf which is home to some of the world’s largest petroleum reserves and export routes.
Analysis from Wikipedia ecords show that a key flashpoint is the Strait of Hormuz, a narrow maritime passage through which roughly one-fifth of global oil supply normally flows daily.
Consequently, military strikes, threats of closure and attacks on ships have sharply reduced tanker traffic, disrupted production and pushed insurers and shipping companies to suspend operations in the area.
With supply from such a critical corridor threatened, oil prices rise almost immediately due to fears of shortages.
The disruption has already triggered a sharp surge in crude prices worldwide. In the early weeks of the conflict, oil jumped from about $73 to over $100 per barrel, an increase of more than 40 percent, with analysts warning prices could climb even higher if hostilities persist.
Retaliatory strikes on refineries, ports and tankers, as well as reduced output from Gulf producers, have compounded the supply shock, while emergency releases from strategic reserves by major economies can only provide temporary relief
As energy costs rise, transportation, manufacturing and food production become more expensive globally, fueling inflation and slowing economic growth.
Higher crude prices raise refining costs, shipping expenses and insurance premiums for fuel cargoes, which in turn push pump prices upward.
In some countries, governments intervene with subsidies or tax cuts, but in deregulated markets consumers bear the full cost.
Prolonged disruption can create logistical bottlenecks, fewer tankers, longer routes to avoid conflict zones and delayed deliveries, leading to periodic shortages even where oil is available.
Economists, however ,warn that sustained energy shocks of this scale can trigger recessionary pressures and destabilize financial markets.
Nigeria, despite being an oil-producing nation, is particularly vulnerable because it imports some of its refined petrol, in spite the fact that Dangote refinery has gone in the production and sale of petrol in the country. Therefore,rising global crude prices increase the cost of imported fuel, weaken the naira through higher demand for foreign exchange and force marketers to raise pump prices.
This translates into higher transport fares, increased food prices and rising cost of living, effects already visible in many Nigerian cities, including Lokoja and its environs.
For government finances, the impact is mixed: oil export revenues may rise, but subsidy pressures, inflation and social hardship intensify.
