by Martin Ayankola

Created on: June 18, 2008   Last Updated: September 28, 2011

The rise in crude oil prices worldwide has continued to put pressure on the world economy. There is virtually no Country anywhere in the world now that the issue of fuel pricing is not germane.

Nigeria, the country with the largest black population in the world with a population of over 140 million people is also facing economic pressure caused by the prices of the commodity it sells to the world.

The government agency that regulates prices of petroleum of petroleum products in Nigeria, the Petroleum Products Pricing Regulatory Agency [PPPRA] has recommended that the retail price for petrol, which is presently being controlled by government, should be N124.77[over a dollar] instead of the government's subsidized price of N70.00. In effect, the government subsidises a litre of petrol at the pump by N54.77 which translates to a huge sum considering the fact that the Country consumes about 30 million litres of petrol daily. Government is already mounting a campaign to support an imminent increase in prices of products but opponents of the campaign are pointing at profligacy and corruption in government as a reason why government should not increase the prices. They reason that the money that could be saved from such an increase could end up in private pockets.

Furthermore, Nigeria relies basically on road transportation to move people and commodities around which suggest that any increase in prices will affect fares in the disorganized transport market.

Also, the price of rice, which is an important food in Nigeria, has become so prohibitive that government is now involved in subsidizing its importation. However, government critics in Nigeria are seeing the reliance on importation of rice as a wrong strategy to move the economy forward.

Right now, the Nigerian Agricultural sector is in dire need of reforms. The sector is still operating at a subsistence level after about 48 years of political independence. The Country still relies mainly on the exportation of crude oil as its key foreign exchange earner even though it has tremendous opportunity to promote agriculture to rival oil in providing foreign revenue for the Country.
Many Nigerians have been arguing that one of the key indices of a Country's sovereignty is its ability to feed itself and Nigerian successive governments have not done much in addressing this.

The high prices of crude oil are also killing small businesses in Nigeria. A lot of them are folding up because diesel, which they use to run their power generators because of an ineffective public power supply system, has become too expensive. A litre of diesel , which is unregulated, sells for N149.34, which is well over a dollar per litre.

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