Lorry fares adjusted 15% upwards amidst global petroleum price hikes
Adnan Adams Mohammed
From last week Saturday, February 26, 2022, commercial road transport operators in the country have increased transport fares by 15 percent.
The fare adjustment comes after months of agitation by the commercial drivers calling on the government to intervene to reduce prices of fuel at the pumps but could not get any results as prices rather kept on rising week by week. Also the fare increase is justifiable as current Russia-Ukraine war has triggered oil prices to jump on fears that the crisis will disrupt supply chains across the world.
As at last week, futures of Brent crude, the international benchmark, reached a seven-year high of almost $98 (£72) after Russia recognised breakaway rebel regions in Ukraine’s east as independent states. But, in the situation where, Russia is the second largest exporter of crude oil after Saudi Arabia and also the world’s top producer of natural gas, then the world should expect worst of fuel prices domestically.
The border tensions may have “substantial implications”, Sue Trinh of Manulife Investment Management said. Sanctions forcing Russia to supply less crude or natural gas would have “important impact on the global economy.”
The transport unions further noted that, the increased fares was in line with the administrative arrangement on public transport fares and comes after intense negotiations with stakeholders and in consideration of the plight of drivers, commuters and the general public.
But, an economist has noted that stakeholders should expect the upcoming 15% increase in transport fares as announced by the Road Transport Operators, to increase national inflation in the coming months.
“The point is that with the rising cost of living and fuel prices, drivers will certainly ask for an increment in fares. If you, however, look at the non-food basket of inflation, transport accounts for about 10.1%. That tells you that it will slightly affect other things like food and other things, but it won’t lead to a major shake-up in the national inflation rate”, Head of the Economics Division at the Institute of Statistical, Social and Economic Research, at the University of Ghana, Prof. Peter Quartey has said. “It will lead to some inflation but it shouldn’t be major.”
Prof. Quartey further expressed hope that the impact of the transport fares increase on inflation will be dampened with an increase in food production.
“The impact of the rise in transport fares can be dampened if our food production increases. You know inflation is caused by demand and supply-side factors, so if the supply side improves, it will dampen some of these occurrences. It might not erode it completely, but it will dampen any hikes. And we’ve seen the rains coming in and the likes, so production of some food items should mitigate the impact of transport fares on inflation.”