A development economist, Mohammed Nezifi, has said that the government may be forced to raise the wages of workers in light of the recent rise in the price of petrol.
Speaking with NAN on Friday in Abuja, Nezifi said the government may face demands for pay raises or subsidies, which could result in higher fiscal deficits and debt.
NAN reported that NNPCL Retail Ltd management, on September 3, upwardly reviewed the pump price of petrol from between N568 – N617 per litre to N897 per liter.
Higher fuel prices increase costs more for poor households, since a larger share of their budget goes to essentials like transportation and food, Nezifi observed.
He said that this could lead to increased poverty and widen the gap between the rich and the poor.
Such situations could be mitigated by government policies, like subsidy or welfare programs, but that would add additional burden on the general budget, according to him.
Nezifi warned that the economic strains of the fuel price rise may lead to social unrest-a rally or strike-that could cripple economic activities and paralyze governance.
Another economist, David Ambi, recommended the government to investigate ways of providing a competitive market setting that may curtail most of the challenges presented.
“This, he explained, can perhaps be done by reinstating targeted subsidies or social safety nets and also by making policies in harmony with economic principles that ensure efficiency in the market and protection for consumers, too.”.
