Please can someone explain the reason for the disparity? Hear in the State, the gas pump price fluctuates. It goes up and down weekly, monthly and whatever because of the unstable global oil price. But the most interesting part of the phenomenon is that all the prices of goods and services remain the same whether the pump price goes up or not. Commodity prices remain the same. But in Nigeria, commodity prices are the function of fuel prices. The worst part is that the prices never come down again once they are inflated because fuel price goes up even after fuel price comes down.

Simple economics:

Increase in fuel/gas prices will result in proportional increase in prices of commodities because transportation cost for many of the goods increases. It's not the same in the states because your transport system is more efficient and there are alternatives to road transport. Again businesses need power to survive. Imagine perishable commodities that require refrigeration, or sales outlets that require power, infact almost all businesses need power - even the SMEs, local retail shops etc. Power is relatively stable in the states. The US and many developed countries also make good use of alternatives such as wind turbines, hydro power, solar power etc, but in an economy where power is largely dependent on pms & power-generators that gulp pms/fuel, what do you expect if the business person must maintain the margin of profit or break even? the prices of commodities must be increased. Has pms prices ever gone down significantly? NO!

Caveat: I'm not an economics student!

pato405:
Simple economics:

Increase in fuel/gas prices will result in proportional increase in prices of commodities because transportation cost for many of the goods increases. It's not the same in the states because your transport system is more efficient and there are alternatives to road transport. Again businesses need power to survive. Imagine perishable commodities that require refrigeration, or sales outlets that require power, infact almost all businesses need power - even the SMEs, local retail shops etc. Power is relatively stable in the states. The US and many developed countries also make good use of alternatives such as wind turbines, hydro power, solar power etc, but in an economy where power is largely dependent on pms & power-generators that gulp pms/fuel, what do you expect if the business person must maintain the margin of profit or break even? the prices of commodities must be increased. Has pms prices ever gone down significantly? NO!

Caveat: I'm not an economics student!

You make sense. But it's not as if distribution outlets and good stores in the cities and around the country sides don't make use of trucks that run on gas to transport and distribute their supplies to the stores nationwide. Many times, these trucks tavel from as far as Canada to make supplies in the US even when gas price is high. But this does not reflect in the prices you pay for their goods in those stores. Greed must have a part to play in the Nigerian instance and looking for every unhealthy opportunity to amass wealth at the expense of the poor masses. That's why the prices never come down again once fuel price is normalized.