Rising transportation cost causing commodity price inflation — Experts

Experts have blamed the rising cost of commodities in the market on the high cost of transporting goods from one point to another in Nigeria.

The country depends largely on land transport for haulage services, thereby being greatly affected by the removal of fuel subsidies.

Speaking to the Nigerian Tribune, Paul Kyan, a transporter who owns a jumper (a vehicle designed for freight movement), said the cost of moving goods in the country has doubled within the last few months.

He explained that “we used to carry goods at the rate of N50,000 to N60,000 from Makurdi to Abuja, but now the least one can get is at the rate of N150,000 and above.

“The price also depends on the type of goods one is conveying; food products and other goods have different prices.”. Kyan stated.

Another transporter, Audu Isah, said the rising cost of haulage services in Nigeria is due to the increase in fuel prices.

“I spend over N50,000 non-fuel from Kaduna to Abuja, so imagine if I were to charge you for goods from Abuja to Kaduna; you know that the price is already high,” he explained.

A trader at Karu Market, Chineye Okafor, told our reporter that “if you want to move goods from one state to another in this country, you pay through your nose.

“When these goods arrive, the only way for you to recover your capital is to sell at a price that, at the end of the day, you are not at a loss” she explained.

Currently, the Minister of Transportation, Sen. Said Alkali, has been up and doing to ensure that the country has a workable rail system that will become an alternative means of transportation.

Recently in Kano, at the Policy Dialogue on Transportation hosted by the state government, the Minister called for an integrated policy on transport that will ensure efficiency, competitiveness, an integrated private sector-driven, and sustainable world-class land transportation system that will meet the needs of a growing economy and the people.

Similarly, the Minister went further and flagged off freight services by railway from Dala Dry Port Kano to Seaport in Lagos.

“Fixing of the narrow gauge was to ensure the resumption of freight service from Lagos to Kano, being the commercial nerve centre of northern Nigeria, without interrupting the standard gauge construction,” Alkali stated in Kano.

Even though there are ongoing efforts in the rehabilitation and construction of rail lines in Nigeria, it seems that if the price of fuel remains high, the prices of commodities in the market may remain the same or even rise further.

To curtail the rising prices of commodities in the Nigerian market, the Federal Competition and Consumer Protection Commission (FCCPC) conducted some market surveys in Abuja and the neighbouring states.

During the exercise, escalating transportation costs emerged as a key driver of the price hike. With transportation serving as a pivotal link in the distribution network, any increase in transportation expenses directly translates into higher prices for consumers (as traders explained to the Commission).

In the end, there was nothing the Commission could do, as the findings revealed that the rising cost of commodities in the market was just a reaction of natural market forces due to government policies.

With land transportation as the major source of haulage services in Nigeria, the country may continue to witness a rise in the cost of products until the initiatives of the present administration in the transport sector take effect.

Source: Nigerian Tribune

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