Fuel is a crucial product in Nigeria which the nation depends on for most of its operations. In recent times there has been scarcity of fuel in Lagos which has increased the traffic situation as motorists queue for fuel at any available filling station, thereby obstructing the free flow of traffic.
As the fuel scarcity prolongs other operations that use fuel in their service delivery tend to increase prices of their services because the available filling stations that supply fuel have hiked the price of fuel. This results in higher production and transportation costs which translates in the increment of service charges.
For instance, a delivery service company that used to charge N1,000 per delivery will be forced to increase such charge if it used to buy fuel at N97/litre but presently buys a litre at N120 – N150.
Likewise, a farmer who used to transport farm produce from one location to another would adjust for the extra cost by increasing the cost of the produce.
Also a production company that has to use fuel to generate electricity, due to the pathetic shortage of electricity supply in Nigeria, would have to accommodate for the extra expenses through the price increase of its product.
As these products and services increase, there would also be an increase in the rental value of properties in Lagos.
On a broader note, as the scarcity persists and prices of products and services increase, people who stay in locations far away from their place of work would have to pay higher or buy more fuel, if they have cars, at a higher rate than usual, without any increase in their salary, would prefer residing, temporarily, at locations close to their place of work in order to reduce cost and stress caused by traffic congestion. And the more concentration of people, with less number of accommodation to carter for them, the more monopolistic the property market becomes and the higher the rental value of properties within such location.
Also due to the natural monopolistic property market and infective laws guiding rental value in Lagos, Landlords have control over the rent.
For example, a landlord whose expenses have increased due to the fuel scarcity and whose property tenancy is about to expire would tend to increase rent because rent increment is based on a landlord’s mode in Lagos.
Likewise, the service charge of a serviced apartment would increase because services that require the use of fuel have been affected by the hike of fuel prices.
It is astonishing that hike in fuel prices can have such rippling effects to the extent that it can affect rental value.
Nigeria is a blessed and great country with all kinds of resources she can use to sustain her economy as well as support other countries, unfortunately, this is not the case because the people in power who can ensure that the economy prospers don’t care about the welfare of the people, but if we, the people, can unite and stand for what is good for the economy, we can collectively conquer the oppositions to the progress of the country.