EDITORIAL: Price Caps And The Crises Of Affordability
- We Support A Call For A Cap On The Increasing Price Of Fuel
Across the globe, governments are up and against it, they try to work out a response to the collateral damage arising out of the bombardment of Iran and the response of the Iranians who are not about to meekly surrender.
The dislocation has resulted in long fuel queues. Some countries are already going back to the era of COVID-19 and asking people to work from home. No option is to be left out.
Even before the events in Iran a spectre was already haunting Nigeria in the form of a punitively punishing cost-of-living crisis for which there has been no adequate response.
The situation is worse now with increases in fuel price and the multiplier effects on essential goods and services.
Proffering a solution, the African Democratic Congress (ADC) has offered a sensible way out. A newspaper report a few days ago captured the position of the ADC- “The African Democratic Congress (ADC) has urged the Federal Government to introduce an immediate, temporary cap on petrol prices, warning that rising fuel costs are increasing the cost of living for millions of Nigerians. In a statement on Wednesday, the party’s National Publicity Secretary, Bolaji Abdullahi, said the request was prompted by continued increases in petrol prices, which have affected transportation, food prices, and household expenses across the country.”
We support the call for a temporary price cap. This is very important in order to ameliorate the punishing dislocation on an already hard-pressed people. A key problem here is the wholesale commitment of the present government to a romanticized conception of a “Free-Market”. This is delusional. Countries that operate a version of a free market such as South korea are already navigating a course based on options such as releasing from their strategic reserves and a price cap.
Any delusion about an idolized interpretations of a purported free market will be a punitive punishment on the people. The question must be brought up- what is the state of Nigeria’s fuel reserve?
The National Assembly should have asked and demanded an answer to this question two weeks ago. It should do so now. We already know about our foreign exchange reserve for sensible operational reasons, we should also know at any given time about our fuel reserve .For this is not only an economic issue, it’s also part of our national security template. In this instance, national Security is interwoven with economic issue. Henceforth, at any given time, Nigeria’s fuel reserve must always be on the front burner.
The solid fuel reserve will be important in determining a price cap and the longevity of the price cap. Without a price cap there will be even more disruption to the already battered manufacturing sector, in addition, the impacts on services and logistics will also be negative.
The price cap is imperative now and should be effected with urgency.Other temporary relief should come with effecting proposals such as working from home and provision of LNG bosses directed in particular at the schools and public sector workers just as we saw during Covid-19. No option must be ruled out.We are in a crisis and there must be a price cap now!
