A Review of the Nigerian Energy Industry

Fuel scarcity pushes up food prices

13 May 2015, Abuja – The continuous scarcity of refined petroleum products, especially petrol, and the attendant high cost of procuring them have pushed up the prices of essential food items in most parts of the country, investigation has revealed.

Oil price riseTraders attribute the rise in food prices to the high cost of transporting the produce from the farm to the market coupled with high exchange rate of the naira against major international currencies and seasonal availability of some of the produce.

Our correspondent, who surveyed the prices of various food items in some major markets in different parts of Lagos State, discovered that items like beans, tomatoes, red pepper, onion, orange and maize had become more expensive in the past two weeks due to the acute scarcity of fuel nationwide.

Even though the Federal Government has paid over N150bn to the marketers of petroleum products out of the outstanding subsidy claims and the strike by tanker drivers and their employers has been called off, very few filling stations are selling petrol to motorists.

The few ones that have the product to dispense are cashing in on the scarcity to sell at very high prices of between N140 and N200 per litre, far above the N87 official price.

A trader at the Olowu Market in Ikeja, Lagos, Mrs. Iyabo Fatoki, said although the cost of buying tomatoes from wholesalers had not changed much from what it was the previous week, the cost of transporting it and other soup ingredients from the Mile 12 Market had risen.

“We now pay N400 to transport a basket of tomatoes instead of N150 before the fuel scarcity started. As a result, a bowl of tomatoes that I sold for N150 now sells for N200,” she said.

A seller of cereals in the same market, Mr. Joe Akabachukwu, said that the price of a bag of ‘yellow garri’ sourced from Benin, Edo State, increased from N5,500 to N6,300 as a result of the rise in the cost of transporting it.

He added that a bag of parboiled rice, which he used to purchase from wholesalers at N6,800, was now N7,400.

“I have not been able to replace my stock of melon and soybeans for the past three weeks because I have not seen any transporter that will collect a reasonable amount from me to bring them here,” Akabachukwu said.

Similarly, a foodstuff retailer at the Oko-Oba Market, Mr. Leonard Ogbonna, told our correspondent that the falling value of the naira had affected the prices of some food items usually imported into the country.

Citing the example of a special brand of ‘garri’ imported from Cotonou, Benin Republic, he said the price of the commodity had moved from N5,500 to N7,000 per bag between January and now.

According to Ogbonna, there has also been changes in food prices, especially for produce that are seasonal in nature, even before the fuel scarcity started.

“The ‘oloyin’ beans, which sold for N11,000 a bag in March, now costs N13,000, while the price of ‘drum’ beans has risen from N9,500 to N11,000. This is the off season and farmers and wholesalers are presently selling the products in their stores,” he explained.

He said if the fuel scarcity were to last longer, the hike in food prices would be more pronounced.

– Punch

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