• Monday, June 17, 2024
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BusinessDay

Rising costs dampen Sallah, Summer holidays

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Individuals and families who may have hoped to take advantage of the Salah and summer holidays to restock basic necessities and food items are getting more than they bargained for, with skyrocketing commodity prices.

BusinessDay findings show that  prices of essential commodities such as gas, kerosene, bread, rice, among others, have gone up markedly.

This is piling pressure on the monthly pay cheques of many Nigerian consumers, causing a search for alternatives.

As at June this year, the price of  a 12.5kg cylinder of cooking gas rose from N3, 000 to between N3, 500 and N4, 000. In July the price has gone to between N4, 200 N4, 300, differing according to location. The result of the over 40 percent increase in the price is that middle income earners have to substitute the scarce commodity for kerosene while lower income earners make do with either coal or firewood for their cooking.

Similarly, the price of kerosene has witnessed an almost  50 percent increase in the last three weeks. As a result, prices have gone up by as much as N300 against N105 and N110 it was previously sold. Roadside vendors are cashing in on the situation and hiking prices. For instance, 4.5 litres of the product is now sold between N1, 200 and N1, 400.

Part of the reason for the scarcity of products like gas, according to a stakeholder in the industry, is because depots that were previously used for storage of the product have been converted to store petrol, in order to forestall shortages of the latter. Another view is that marketers are responsible for the scarcity due to hoarding activities that still plague the industry.

Aside from fuel products, consumers also have to grapple with the rise in the price of bread, a major staple in many Nigerian homes, from N200 to N250 and N300 in some cases. ‘Agege Bread,’ mostly consumed by low income earners, has risen by 33 percent to sell for N200 from N150.

Apart from bread, the price of sugar has also soared. Tajudeen Ibrahim, team head at Chapel Denham Hill had earlier told BusinessDay that soaring sugar prices not only affects the consumers, it has also deepened the woes of raw sugar importers.

“The major concerns for the broad economy are two. The first is a further pressure on FX, as sugar refiners will demand for more US$ to import raw sugar as prices increase. The second is higher food inflation, as the relevant companies pass input cost increases to consumers in Nigeria,’’ Ibrahim said.

Also speaking on the increase in the price of sugar, Sule Abdullahi, Acting Group Managing Director, Dangote Sugar Refinery said, “The price of sugar increased as a result of the change in foreign exchange.”

The prices of certain food items have also increased considerably in the last one month. For fresh tomatoes, many Nigerians have long resorted to using tin tomatoes or palm kernel for their stew while others now prefer local rice over imported rice because of the inflated prices.

However, a market leader at the popular Mile 12 market in Lagos told BusinessDay, that presently prices of the local variety of tomatoes are coming down because they appear to be in full season.

The local varieties, he said, are mostly from Oyo, Osun, Ondo and Ogun states. This however is in contrast with the genetically modified variety which remains expensive. A 40kg basket of the local variety now goes for N8,000 at a minimum, whereas the modified variety of the same size sells nothing less than N25,000.

The prices of a bag of fresh pepper and 50kg bag of imported rice were N18, 000 and N16, 000 respectively but today, it is N37, 000 and N22, 000 respectively which is over a 100 percent increase for fresh pepper and 46.6 percent increase for the imported rice.

“Eighty-five per cent of my customers complain that foodstuffs are very expensive. Most of my customers now prefer to buy palm nuts for their stew, use steamed vegetables, or even use carrots in place of tomatoes,” said Chiamaka Udemezue, a trader at Mile 12 market.

The price of a 50kg bag of garri rose  N12, 000 from N9, 000 and a 50kg bag of beans increased by 50 percent from N14, 000 to N21, 000. The price of 25 litres of groundnut oil rose by 30.7 percent from N9, 100 to N11, 900.

“Two weeks ago, the plantain I threw away was worth more than N5, 000 because there were no sales. It’s like people got tired that the plantain was expensive and they stopped buying,” Udemezue said.

Commenting on the fluctuating prices of these key perishable food items, Biliya Adam, secretary of perishable goods section at Mile 12 market attributed the price changes to seasonal factors and the entrance of local varieties from nearby states but warns that the price of fresh tomatoes might shoot up soon.

CHINWE AGBEZE & FRANK ELEANYA