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Two months ago, President Bola Tinubu, in his inaugural speech, declared the removal of fuel subsidy, with the claims that the current 2023 budget did not include it. Although the decision was to commence in June, we saw an immediate hike in fuel prices from about ₦195 to over ₦500.
Barely two months later, there has been another hike, with the NNPC increasing fuel prices from the previous ₦537 to ₦617 per litre, attributing it to increased crude oil prices in the international market.
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How does this hike affect Nigerians?
These recent hikes have directly impacted the cost of living for Nigerians, particularly those from low-income households, and have rippled through other sectors like transportation, leading to increased prices of fares. It has also significantly impacted the economy as businesses may face challenges in production and operations, resulting in a surge in the cost of goods and services, reduced profitability, job losses, and slower economic growth in the country.
Only a year ago, you could fill your car tank with about ₦15,000. Now, you need 3x that amount or even more to fill the same car tank. While it is a hard pill to swallow, it is important to find ways to adjust to this new reality.
Here are some ways that Nigerians can deal with the new fuel price hike:
- Carpooling: This allows you to share fuel cost with other people who are going in the same direction. It can be a great way to save money, especially if you have a long commute and need to take several buses before your destination. With the increased fuel prices, carpooling becomes an effective solution to share commuting expenses. Coordinate with friends, neighbours, or colleagues with similar routes and schedules and share the cost. It is also a great way to make new friends or network, strengthen old bonds and probably find the love of your life.
- Converting cars and generators to run on auto-gas: With the government’s push for autogas adoption in Nigeria, converting your vehicles and generators to run on autogas like liquefied petroleum gas (LPG) can be a viable solution. Autogas is more cost-effective than traditional gasoline and diesel fuels, making it an even better alternative for individuals, public drivers and businesses.
- Use of public transport system: Another practical way to deal with the fuel price increase is to adopt public vehicles, a great and affordable alternative to moving around without personally driving. This option saves you a significant amount you would have spent on fuel. Buses, tricycles, commonly known as keke, trains, and other forms of public transport are generally cheaper than individual car usage.
- Attend less social activities: It can be difficult to say no to friends when they invite us out or resist the urge to attend every social activity happening around us, but to adjust to the current fuel situation, it is an essential thing to do. This means less “we outside” and more time indoors. Instead, you can plan indoor activities that do not require you to spend on fuel, like reading, baking, cooking with friends, etc or organise meetups closer to home. This will significantly minimise your fuel consumption and save you more money.
- Invest in an inverter: Inverters are a great investment, especially in a country like Nigeria, where electricity isn’t reliable, and fuel cost keeps increasing. They allow you to store electricity for a power outage, helping you cope with electricity supply fluctuations, reducing your dependency on generators and saving fuel costs. Although inverters are expensive, they can last up to 15 years.
- Utilise rechargeable fans, bulbs and torchlights: Rechargeable LED or solar bulbs and torches can significantly reduce fuel consumption, as they only require a minimum amount of electricity or solar to be powered.
- Adjust your spending: It is important to review and adjust your overall spending to deal with this fuel situation. Identify areas where you can reduce unnecessary expenses and prioritise essential needs. Budgeting and financial planning help individuals navigate challenging economic times like this. If you need help to make a budget here’s how to make one you’ll use.
- Maintain fewer vehicles: If you own multiple cars, consider parking one or more of them and relying on carpooling or public transport for daily commuting. Maintaining fewer vehicles reduces fuel expenses, significantly easing the financial burden of rising fuel prices.
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In the face of the fuel price hike and other economic challenges, Nigerians must embrace alternative transportation options that can help cushion the impact of the increased fuel prices.
It is equally important to think about long-term solutions for financial stability. Investing can be a powerful tool in building wealth and safeguarding against economic uncertainties like this. And this is why we’re here for you.
At Risevest, we’re committed to helping you build wealth and achieve financial freedom through access to global investment opportunities that can protect your money against inflation and other economic factors. So if you haven’t begun investing, click here to create and fund your account.