Nigeria: Petrol Price Hike - Schools, Hotels, Other Nigerian Businesses Groan

31 October 2024

Petrol prices have surged from below N200 in 2023 to over N1000 in 2024.

"This is my most difficult time in over 20 years of this business," laments Saheed Olowokere, a 55-year-old commercial bus driver in Lagos.

Petrol prices have surged from below N200 in 2023 to over N1000 in 2024. Mr Olowokere said the increase threatens his family's livelihood and the education of his five children, as he has yet to pay their school fees for the new term which commenced in September.

On 18 October, the driver arrived at the garage at 5 a.m. to queue for passengers from Ipodo, Ikeja to CMS, Lagos, but when our reporter met him 11 hours later, he had yet to make a single trip.

"People hardly go out anymore," he lamented. "I spend over N15,000 daily on fuel for my 20-seater bus, but with fares at N1,000 per passenger, it's becoming unsustainable."

On 9 October, the pump price of petrol at various Nigerian National Petroleum Company Limited (NNPCL) outlets rose further to between N998 and N1,030 per litre in Lagos and other parts of the country.

On Tuesday, the NNPC further adjusted the prices from N998 to N1,020 in Lagos and N1,050 in Abuja, the nation's capital, and other cities of the federation.

This latest increase followed the national oil company's withdrawal as a middleman for petrol from Dangote Refinery. As a result, drivers like Mr Olowokere are forced to either hike fares or reduce services.

Beyond transportation, schools, hotels, and entrepreneurs are also struggling to cope with the price surge.

School owners lament

For the Principal of Dowen College, Lagos, Adebisi Olayiwola, the fuel price hike means increased transportation costs for students and staff members.

Mrs Olayiwola said, "Fueling school vehicles or private cars costs more. We adjusted transportation costs at the start of the term, but the recent surge to over N1,000 per litre was unforeseen.

"We can't keep going back to parents with price increases. Maybe parents living in the same area will try to get their children together. That will assist in reducing the cost of bringing them to school."

Across Nigeria, many private schools simply discontinued bus services due to parents' inability to afford the fees.

In Bauchi State, Caleb Philip, whose children attend Prippema International School, said he was considering changing their schools.

"At least it will save me the cost of fueling the car to pick them up," Mr Philip said.

Big Trust Academy in Kano State has a solar system but still relies on fuel for the school buses, spending more than N6,000 every day to commute students, according to the school's director, Bashir Ibrahim.

Mr Ibrahim noted that many teachers struggle to arrive at the school on time, which "has significantly affected the efficient functioning of the institution."

Abuja businesses, others not spared.

According to business owners like Christopher Thomas, the CEO of Skylight Marketers and Durable Homes, fluctuating fuel costs are threatening businesses.

"The price of fuel can change dramatically," Mr Thomas said. "Yesterday, it was N1,100, and today, it's N1,175. This increase is surprising and unsustainable."

He said his daily fuel expenses have quadrupled, rising to N80,000. The financial burden of fuel costs has forced many entrepreneurs to reconsider their operations, Mr Thomas said.

The Vice President of Alethea Communication Network Limited, Enomfon Okure, corroborated Mr Thomas' concerns. She said her organisation has stopped using generators and installed solar power to reduce energy costs.

In Kano, our reporter observed that small businesses like barbing centres and phone charging points (charging a phone costs N50 but now costs N70 or N100) located at Ja'en, which relied on fuel, have converted their generators to gas-powered engines.

Hotels reduce staff, other concerns

The situation has also impacted Nigeria's hotels, leading to staff reduction, increased prices, and reduced patronage and profits.

In Bauchi, the Manager of Peoples' Club of Nigeria International Guest House, John Samuel, disengaged some employees because he was hesitant about increasing service prices, fearing customer loss.

In contrast, El-Dormart Hotels and Suites in Maraba, Nasarawa State, increased accommodation fees to offset the rising energy costs.

"We've adjusted our fees accordingly," a worker, who craved anonymity, said, adding: "Management plans to invest in solar energy soon, considering unpredictable fuel price hikes."

The Managing Director and CEO of Larema International Hotel and Suites in Bauchi said his business has been negatively affected, noting that solar energy, the only viable solution, is expensive.

Mr Samuel said despite maintaining rates, customers were requesting discounts due to financial constraints.

"People are highly incapacitated financially now. Everybody is crying. So, if you increase your rate, you are driving them away," he said

Other businesses

The fuel price hike has also affected several micro businesses.

Musa Aliyu, the owner of a commercial phone charging spot at One Man Village in Maraba, Nasarawa State, said he has had to increase his charges.

"I've raised the charging fee from N100 to N200 per phone," he told PREMIUM TIMES. "With rising costs, I cannot operate at a loss."

In Bauchi, business centre operators, where people print documents and make photocopies, expressed frustration.

"We're already struggling with low patronage, and the fuel price hike has worsened our situation," Muhammed Najib lamented. "N2,000 worth of fuel isn't enough for a full day's business."

However, some entrepreneurs have found alternatives. Abdullahi Salisu, who runs a laundry and dry cleaning factory in Bauchi, shared his solution. "During power outages, we use charcoal irons," he said.

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