Business
Household bill surges by 27.64% as inflation bites
The Consumer Price Index (CPI) for Housing, Water, Electricity, Gas, and Other Fuels (altogether referred to as ‘household bills’) has surged by 27.64% over the past year, reflecting a substantial increase as Nigerians grapple with escalating inflation rates and declining incomes.
According to the March 2024 CPI data released by the National Bureau of Statistics (NBS), the CPI for Housing, Water, Electricity, Gas, and Other Fuels rose from 437.8 in March 2023 to 558.8 in March 2024.
The CPI serves as a crucial economic barometer, tracking the average fluctuation in prices that consumers pay for a diverse basket of goods and services, which include food and various household expenditures.
According to the latest data from the NBS, expenditures on Housing, Water, Electricity, Gas, and Other Fuels rank as the second most significant drivers of overall inflation across the nation. This trend underscores the growing cost pressures faced by households in the country.
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The NBS CPI data further revealed a record-breaking inflation rate of 27.64% for Housing, Water, Electricity, Gas, and Other Fuels, marking the highest rate ever recorded in this category. The prior peak was observed in December 2016, when it reached 27.25%.
Moreover, the trend in inflation for household bills has demonstrated a consistent uptick since June 2021, starting from a rate of 10.13%. This persistent increase highlights significant and ongoing economic pressures in the essential services sectors, affecting a broad spectrum of Nigerian households.
Nigeria’s challenging economic conditions have deeply affected various sectors, including real estate, impacting individuals, households, and businesses significantly. The most pronounced effects are felt by tenants, particularly in city suburbs, where rents have escalated by over 40% in the past 12 months. This steep increase is placing a substantial financial burden on those in rented accommodations, intensifying the cost of living crisis in urban areas.
The Association of Pure Water Producers recently decried the spiralling costs of pure water sachets, projecting that prices could hit N100 unless immediate actions are taken. The steep rise in production costs, primarily due to materials that soared from N1,100 per kilogram in December 2023 to between N3,600 and N3,700 recently, has severely hampered operations. This situation is exacerbated by the high pricing tactics employed by nylon producers, adding significant strain to pure water manufacturers.
READ ALSO: Just in: Nigeria’s inflation rate hits 31.70% in February
A notable uptick in electricity tariffs, mandated by the Nigerian Electricity Regulatory Commission (NERC), is poised to further strain Nigerians financially. With the termination of energy subsidies for Band A customers—who enjoy at least 20 hours of electricity daily—the latest tariff adjustments reflect an average increase exceeding 200%. This substantial rise in energy costs has triggered widespread criticism from consumer advocacy groups and the public, especially given the ongoing issues with power supply reliability and quality across the nation.
The economic pinch is equally evident in the gas sector, where the price to refill a 5kg cylinder of Liquefied Petroleum Gas (Cooking Gas) climbed to N6,154.50 in February 2024. This represents a significant increase of 19.75% from January 2023’s price of N5,139.25, and an even starker year-on-year jump of 33.78% from N4,600.57 in February 2023.
Similarly, the price of household kerosene has seen a moderate rise from N1,329.53 in January to N1,340.94 in February 2024, marking a 0.86% increase. Annually, the price per litre of kerosene has risen by 14.23% since February 2023, illustrating the continuous upward trend in fuel-related expenses.