Rising Exchange Rate, Skyrocketing Petroleum Price
Despite the intervention of the Central Bank of Liberia (CBL), the rising exchange rate between the Liberian dollar and United States dollar continue to create a serious dilemma for the Liberian economy as petroleum price takes an upward trend.
The pump price of gasoline jumped to LD$500 recently from LD$450 on previous days.
The rising price of fuel comes amid the rapid depreciation of the Liberian dollar against the United States dollar.
The exchange rate which continues to fluctuate is now LD$ 139 to 1 United States dollar with some Forex Bureau(FX ) buying USD1.00 for LD$ 140 as of last Wednesday.
The two currencies traded at LD$139 and LD$140 to USD1.00 but there is a strong indication that the Liberian dollar would further depreciate.
The interplay on the money market on Wednesday forced a rapid increase in the petroleum price which ultimately translated into an increase in transportation fare in Monrovia and its surroundings.
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.
Government recently warned that setting the rate would create a ‘black-market’ which could further create a chaotic situation in the Liberian economy.
Liberia is a free enterprise economy which is mainly controlled by the private sector.
But many Liberians believe that the government has a major role to play in ensuring price stability including simultaneous regulation on the local market.
They strongly believe that failure on the part of government would lead to the imposition of additional cost on the population, which they warned, would strongly undermine the gains made by the very government.
The hike in the price of basic commodities on the Liberian parallel market continue to affect the daily movement of Liberians to the extent that the fare of a commercial taxicab has miraculously increased adding “ taxicab operators are charging from Central Monrovia to ELWA JUNCTION, 100LD while from Central Monrovia to Duala is 60-70LD; then from Monrovia to Grand Kru County, Southeastern Liberia is 8,000LD.
Previously, the fare of a taxicab from Central Monrovia to ELWA JUNCTION was 50-60LD while the fare from Central Monrovia to Duala was 50LD; then the fare from Grand Kru County to Monrovia was 2,500LD respectively.
Our reporter recently confronted a cab driver, on why was the sudden increase in the fare; he responded by attributing the increase to the rising pump price of gasoline, which he believed is deeply- rooted from rising the forex rate on the local market.
The taxi driver jokingly remarked that the price of basic commodities including petroleum products on the Liberian parallel market will continue to increase if government under the dynamic leadership of George Weah pro-poor government don’t find a remedy to the rising exchange rate in the country.
The cab man who spoke on condition of anonymity furthered that “we are forced to increase the transportation fare because of the abrupt increase in the price of petroleum; we are not also happy with the situation because the rising price is equally affecting us as well.”
Some of the commuters interviewed by the Business Day online expressed dismay over the rising fare, and further called on government to remedy the situation,” adding, things are getting tough on a daily basis.