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Nigeria’s surging transport fares deliver further blow to inflation

Commuters under pressure as transport fares surge

Nigeria’s transport fares nearly doubled in June, likely putting upward pressure on inflation which is already at an almost 18-year high in the West African nation.

According to Bloomberg the average fare paid by commuters for bus journeys within a city per trip increased by 98% to 1,285 naira ($1.65) in June from 650 naira in May, according to data published by Nigeria’s statistics agency over the weekend. Transport fares were 120% higher when compared to the same period a year earlier.

The jump follows the removal of government fuel subsidies, which sent the cost of gasoline soaring, and will be reflected in July consumer price index data due to be released Tuesday. Economists polled by Bloomberg forecast annual CPI will advance to 23.6% from 22.8% in June.

Africa’s most populous nation, where about 40% of the population live in extreme poverty, abolished the decades-long subsidy on gasoline in May, leading to more than a tripling of pump prices and also contributing to surging food prices.

Read stories: Transport and food prices on steady rise

Some food items commonly consumed by Nigerians have increased by 25% to 30%, data showed, including key ingredients for the country’s highly popular jollof rice dish. The price for a tin of evaporated milk rose 67%.

Nigerian President Bola Tinubu has declared a state of emergency to counter the rising cost of living and in early August announced a 500 billion naira package of measures to improve food supply, ease transportation costs and boost manufacturing.

Rising inflation has already pushed four million more people into poverty in Nigeria from January to May this year, according to the World Bank.

The removal of fuel subsidies could lead to a further acceleration in the price index to nearly 30% by end of the year, Bank of America’s sub-Saharan Africa economist Tatonga Rusike said in July.