Petrol price surge and the Nigerian worker: When survival becomes a daily struggle

By Ivo Takor

The continuing rise in the price of petrol has moved beyond the realm of energy policy and economic statistics. It has become a serious question of human welfare, social justice and the ability of ordinary Nigerians to live with dignity.

Across the country, Nigerians are confronting a cost-of-living crisis in which the price of virtually every necessity is being pushed upwards by the rising cost of transportation and energy. Recent reports indicate that petrol is selling for about N1,430 per litre in major urban centres, with even higher prices reported in some less accessible locations.

For a worker earning the national minimum wage of N70,000 per month, the arithmetic is disturbing. Ten litres of petrol at N1,430 costs N14,300, more than one-fifth of an entire month’s minimum wage. The N70,000 minimum wage was established under the National Minimum Wage framework following the 2024 amendment.

Yet the worker must still eat, travel to work, pay rent, educate children, meet medical expenses, pay electricity bills and provide for other basic necessities.

This is why the petrol-price question cannot be examined solely from the standpoint of deregulation, market forces, international crude prices or exchange rates. Economic policy must ultimately be measured by its impact on human beings.

For millions of Nigerian workers, wages are increasingly becoming inadequate before they are even received.

Every increase in the price of petrol immediately affects transportation. Bus operators, taxi drivers, commercial motorcyclists, haulage companies and other transport providers understandably adjust their fares to reflect their increased operating costs. The worker therefore pays more simply to get to work and return home.

But the impact does not stop at the bus stop. Farmers pay more to move produce. Traders pay more to transport goods. Manufacturers and small businesses that depend on generators face higher energy costs. Distributors pay more to move products across the country. Eventually, these costs find their way into the prices paid by consumers.

Food, transportation, electricity, school expenses, healthcare and other household necessities consequently compete for a salary that has not increased at anything approaching the same rate.

This is effectively a reduction in real wages. A worker may still receive the same figure on a payslip, but that money buys progressively less.

The situation is even more troubling for Nigerians living below or close to the poverty line. A wealthy household may respond to a fuel-price increase by reducing discretionary expenditure. A poor household frequently has no discretionary expenditure to reduce.

The choices become painfully basic: food or transportation; medicine or school expenses; rent or electricity.

Low-income households spend a substantial part of their resources on necessities. When the prices of those necessities rise sharply, there is very little financial protection available.

Families may begin reducing the quantity or quality of food they consume. Medical treatment may be postponed. Children may be withdrawn from certain educational activities. Savings disappear. Borrowing increases. In that sense, rising petrol prices can become a poverty multiplier.

Particular attention must also be paid to pensioners and elderly Nigerians. Many elderly citizens depend on pensions, retirement savings or financial assistance from their children and extended families. Their capacity to increase their income in response to inflation is considerably limited.

At the same time, many require regular medication, hospital appointments and other healthcare services.

When transport fares rise, going to the hospital becomes more expensive. When distribution costs increase, medicines and essential commodities may become more costly. When the working members of a family are themselves financially distressed, their capacity to support elderly relatives also diminishes.

The welfare of elderly Nigerians therefore deserves specific consideration in any economic intervention designed to cushion the effects of rising energy prices.

Nigeria’s constitutional philosophy does not treat economic management as being completely detached from the welfare of citizens.

Chapter II of the Constitution sets out the Fundamental Objectives and Directive Principles of State Policy. Among other objectives, Section 17 envisages policies directed towards adequate means of livelihood, just and humane conditions of work, protection of the health, safety and welfare of persons in employment, adequate medical facilities, protection of elderly persons against material neglect and public assistance in deserving cases. These principles provide an important framework through which public policy should be examined.

Government unquestionably has to confront difficult fiscal and economic realities. Sustainable public finances, energy security, domestic refining capacity and efficient markets are legitimate concerns.

But economic reform should also be accompanied by serious consideration of its distributional consequences.

A reform cannot be assessed only by what it saves the treasury. Its consequences for the market woman, factory worker, teacher, nurse, civil servant, pensioner, unemployed graduate and low-income household also matter.

Nigeria’s informal economy provides livelihoods for millions of citizens. The barber running a generator, the welder, the food vendor, the commercial driver, the tailor, the small retailer and the neighbourhood business owner all feel the impact of expensive energy.

Many cannot simply absorb repeated cost increases. They are left with three unpleasant choices: increase their prices, reduce their operations or close. Each option has consequences. Increasing prices transfers the burden to consumers. Reducing operations can reduce employment. Business closures destroy livelihoods altogether.

Fuel-price instability therefore has consequences not only for household welfare but also for employment and economic activity. The present conditions justify serious consideration of a coordinated package of measures rather than reliance on a single intervention.

One option under public discussion is a temporary wage award or cost-of-living support for workers whose purchasing power has been significantly weakened. The Nigeria Labour Congress has publicly proposed wage awards as one response to the current rise in petrol prices.

Policymakers could also examine targeted support for pensioners, persons with disabilities and the poorest households, ensuring that assistance is transparent, properly targeted and capable of being audited.

Transportation deserves particular attention. Expanded and reliable mass-transit systems can reduce the amount individual workers spend travelling to and from work. Support for high-capacity buses, rail transport and alternative-energy public transport could provide more durable relief than temporary cash payments alone.

There is also a case for continued examination of domestic refining, crude supply arrangements, competition within the downstream petroleum sector and national fuel-storage capacity.

Regulators should equally maintain effective market surveillance. Deregulation should not mean the absence of oversight. Nigerians are entitled to transparency concerning the factors determining pump prices and to protection against anti-competitive conduct or unjustifiable exploitation.

Beyond petrol, reliable electricity remains essential. As long as millions of households and businesses must generate their own electricity with petrol or diesel, changes in petroleum prices will continue to have an unusually large effect on the wider economy.

Government, organised labour, employers, civil society and other stakeholders have an important role in finding sustainable responses. Social dialogue should not begin only when frustration has reached the point of strikes and protests.

A functioning industrial-relations system should provide mechanisms through which economic evidence is shared, workers’ concerns are heard, government constraints are explained and practical compromises are negotiated.

The objective should not merely be industrial peace. It should be social justice accompanied by economic sustainability.

Nigeria needs economic reforms. It needs investment, infrastructure, domestic refining, fiscal stability and functioning markets. But Nigerians also need to survive long enough to enjoy the promised benefits of those reforms.

A worker who spends an increasing proportion of his salary merely travelling to work cannot indefinitely be told to endure. A pensioner choosing between medication and food cannot be treated as an unfortunate statistic.

A mother reducing her family’s meals because food prices have risen again is experiencing economic policy in its most immediate form.

A small business owner shutting down because energy costs have consumed the profit margin represents another job and source of livelihood potentially lost.

The current petrol-price surge therefore requires more than explanations about international markets. It requires careful examination of wages, transportation, pensions, social protection, domestic energy production, competition and electricity supply as interconnected parts of one national welfare challenge. Nigeria’s economic policies must ultimately serve Nigerians.

The enduring principle of decent work is that labour should provide a person with a reasonable opportunity to live in dignity. When full-time employment no longer provides sufficient protection against hunger, transportation hardship and inability to obtain basic healthcare, society has a legitimate reason to examine whether its economic and social protections remain adequate.

The challenge before the Federal Government is therefore to balance market realities with the constitutional aspiration of protecting the welfare of the people.

For workers, poor and elderly Nigerians, this is not an abstract debate about barrels of crude oil, exchange rates or market indices. It is about food on the table, transport to work, medicine in the cupboard and dignity in old age.

Those considerations deserve a central place in Nigeria’s economic response to the present fuel-price crisis.

•Takor, mni, is a human rights lawyer, trade unionist and pension advocate.

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