The rising exchange rate between the Liberian and United States (US) dollars has created a new dilemma for the economy as petroleum price takes an upward trend. The pump price of gasoline jumped to L$385 on Tuesday, up from L$360 on the previous day. The rising fuel price comes amid rapid depreciation of the Liberian dollar against the US dollar, our business desk finds.
The exchange rate currently stands at L$88.5 to US$1 with some Forex Bureaus buying a US$ for L$90. On Monday, the two currencies traded at L$88 to US$1, but there was strong indication that the Liberian dollar would have subsequently depreciated.
The interplay on the money market on Tuesday forced a rapid increase in petroleum prices and subsequently transportation fares by drivers across Monrovia. The Government of Liberia (GOL) has repeatedly said that it has no direct control over the foreign exchange market as it is influenced by the market forces of supply and demand.
The GOL recently warned that setting the rate would create a ‘black market’ which could further create chaos in the economy. Liberia is a free enterprise economy which is mostly controlled by the private sector.
But many Liberians believe that the government has a major role to play in ensuring price stability including properly regulating the market.
They strongly believe that failure on the part of the government would lead to the imposition of additional costs on the population, which they warned, would undermine the gains by the vary government. Some economists, however, warn against interference by the government. Amidst this debate, the prices of key commodities, mainly petroleum, have begun to rise.
The hike in petroleum price directly affected fares as commercial taxi cab drivers were charging up to L$90 from central Monrovia to Paynesville Red-light. Bus fare also rose from L$35 to L$50 with some buses charging up to L$75.
Previously, the fare in taxi cab from central Monrovia to Red-light was L$60, while bus fare was L$35 per person. Fares were also increased for other destinations of the city. Commuters reported L$5 increase from central Monrovia to Airfield Matadi, from L$35 previously to L$40 per person.
When asked Tuesday, May 06, a taxi cab driver directly attributed the increment to the increase in the pump price of gasoline.
“Gasoline price has been increased abruptly,” this taxi cab driver said on condition of anonymity. “We are forced to also increase fare,” he added. This elderly cab driver jokingly sang “when you’re up, you’re; so everything is up.”
This song was a popular song sung by supporters of the ruling Unity Party (UP) during the 2011 general and presidential elections.
This driver, however, clarified that his intention was not to mock the ruling party, but noted that things are really tough.
“We are not happy to increase fare, but we can’t also operate at loss,” he said. Some of the commuters spoken with expressed dismay over the rising fares and called on the government to intervene. “Things are very tough on the ground. Everybody knows how tough it is to make living in Liberia and so I want the government to come in at this time and save the day,” said Madam Estella Benson.
Madam Benson, who lives in the Airfield area, stressed the need for strong GOL action in dealing with the situation on the market. “If they sit and do nothing, we will definitely perish,” she said.
To further exacerbate the transport problem, most of the GOL-owned public transport buses managed by the National Transit Authority (NTA) are missing from the streets.
Our business desk was told yesterday that most of the buses are down due to maintenance problem. Though our could get a word from the NTA up to press time, GOL sources confirmed that only few of the buses are in the traffic in Monrovia.
“Some of the buses are directly assigned to run between Monrovia and Buchanan as well as Monrovia to Gbarnga and Monrovia to Tubmanburg and Bo Waterside,” this source said. When running Monrovia, NTA buses charged L$15.00 per person for any distance.