With the increase in prices, demand for goods with high demand elasticity plummets, which has a devastating effect on small-scale businesses that produce these goods and services and sometimes put them out of business. Hotels, private schools, artisans, and small-scale producers are responding by, reducing their staff strength, shortening their hours of operation, or shutting down outrightly because of the increase in the cost of production.
The last time the world suffered a food-price shock as we have now, it helped set off the Arab Spring, a wave of uprisings that ousted four presidents and led to horrific civil wars in faraway Syria and Libya. The “END SARS” bruhaha is still fresh in our minds. It is time for a significant policy shift by the Nigerian government on oil. We need to start signing an array of sweeping executive orders and policies to create an energy mix fit for Nigeria’s growth. This policy shift should have short-term, medium-term, and long-term outlook. The short-term focus should be on solving the current diesel price crisis.