The recent decision by the Federal Government to allow the forces of demand and supply to determined the price of petrol as announced in a press conference at Abuja by the General Manager (Admin and Human Resources) of the Petroleum Products Pricing Regulatory Agency, PPPRA), Victor Shidok, will force untold hardship into poor Nigerians while the rich and leaders with the resources, influence or higher bargaining power will not feel the pains of the poor masses. It is a wrong decision coming at a wrong timing where people and businesses are recovering from the COVID 19 pandemic hardship.
The decision will make prices of goods and services to increase while it is the consumers that will suffer the most setback especially the poor Nigerians, many of whom are a disadvantage end and can hardly feed a day.
What our country Nigeria is experiencing is slow or negative economic growth and relatively high unemployment, or economic stagnation, which is at the same time accompanied by rising prices i.e. stagflation whereby gross domestic product (GDP) is declining. The economy is experiencing a simultaneous increase in inflation and stagnation of economic output.
This economic phenomenon is caused when a sudden increase in the cost of oil reduces an economy’s productive capacity dramatically. It happens as a results of poorly made economic policy, harsh regulation of markets, goods and labour in an inflationary environment which the government has taken to and that led us to the current mess in the first place.
One tested solution to this economic phenomenon is to increase aggregate supply (AS) through supply-side policies, for example, privatisation and deregulation to increase efficiency and reduce costs of production, not just allowing the invincible hand of demand and supply to determine price and the situation of things.
Fact is, Nigeria is in a worse trade-off and the way-out can be easier said than done.
However, everything falls on our leaders. After all, they brought us to this mess we are because of their poor economic policy and the inability to implement good policy and they will be the ones to bring us out.
He hereby submitted.
Amb. Preye Tambou is a trained economist, an Author of over 15books, Freelance Writer, Content Management Personnel and Group CEO of Edgewise Group (a company that’s into energy and non energy sectors).
He writes from Warri, Delta State