Petrol price hike may force wage increase - Expert

A development economist, Mohammed Nezifi, has warned that the government will face pressure to increase workers’ wages following the recent hike in petrol prices.

In an interview with the News Agency of Nigeria (NAN) on Friday in Abuja, Nezifi stated that the government might face demands for wage increases or subsidies, which could lead to increased fiscal deficits and public debt.

NAN reports that the Nigeria National Petroleum Company Limited Ltd (NNPCL) Retail Management on September. 3 approved the upward review of petrol pump price from N568 -N617 per litre to N897 per litre.

Nezifi noted that the fuel price hike disproportionately affected lower-income households, who spend a larger portion of their income on necessities like transportation and food.

This, he said, could increase poverty rates and widen the gap between the rich and the poor.

He pointed out that government interventions, such as subsidies or social welfare programmes, might be needed to mitigate these effects, but this could place additional pressure on public finances.

Nezifi warned that the economic hardship resulting from the petrol price hike could lead to social unrest, including protests or strikes, which could have a destabilising effect on economic activities and governance.

Another economic expert, David Ambi, suggested that the government should consider fostering a more competitive market environment to address these issues.

This, he said, could be achieved through reintroducing targeted subsidies or social safety nets and aligning policies with economic principles that promoted both market efficiency and consumer protection.

By doing so, the government could help stabilise the economy and improve the standard of living for its citizens.(NAN)