Nigerian manufacturers have expressed concern over the price of diesel, which has risen to N1,275 per litre in Lagos and above N1,300 outside the state, All Nigeria Latest News reports.
The product is currently being sold in Kano State for N1,270 per litre, while outside the metropolis, the price is even higher. This signifies a significant 26 percent surge in price within the span of less than one week. Just last week, on October 23, the product was available for N1,030.
Yesterday, many filling stations in Lagos raised their prices to between N1,250 and N1,270.
Manufacturers, grappling with persistent challenges such as the forex crisis, high interest rates, and unreliable power supply, express concerns that the recent surge in diesel prices could exacerbate their difficulties, as diesel is a crucial energy source for their factories.
This situation unfolds against the backdrop of escalating inflation, reaching 26.7 percent in October, intensifying the financial strain on numerous families and households, leading to a deepening cost of living crisis. Stakeholders emphasize that the spike in diesel prices poses a significant threat to the masses already burdened by high inflation.
Wada Jamilu, a transporter in Lagos said with the increase in the price of the product, a trailer would consume diesel worth N1.5m to travel from Kano to Lagos and come back.
He said owners of trailers would have to increase their transportation fares.
Abdulrasheed Olapade, a oil marketer noted that diesel had for long been deregulated and that its price is determined by the international market.
“As I am talking to you, it is more than N1,275 at the terminal price and when you have to add transportation cost, it would be more than that. Since it has been deregulated, it is dictated by the world market more so the dollar has also gone up. We are in hot soup with the current price of a dollar.”
A member of the National Association of Road Transport Owners (NARTO), Inuwa Abdullahi, said the high cost of diesel is hitting the association hard.
He said, “When you look at the cost of diesels coupled with the multiple check points by state actors and non-state actors and the bad roads and the high cost of spare parts, a trip that a truck is supposed to go for about N500,000 would be around N2m now.
“At the end of the day, you will end up with nothing to take home as a driver. We are just there struggling as the diesel continues to go up.”
Factories may shut down
The president of the Premium Bread Makers Association of Nigeria, Emmanuel Onuorah, said the hike in the price of diesel might force factories to shut down.
“The price has increased since Monday. For us as bakers, the implication of that we keep increasing our prices. As long as everything keeps increasing, we would keep adding money to our product so that we can recover costs.
“You can’t do anything again. Flour today is about N43,000. Every day, they would put N5000; N10,000 on one line item. Manufacturers will shut down, industries will shut down.
“As I am talking to you, I am sitting in my factory. Everybody will close up. Anybody who cannot do it again will pack up and leave. It is tough. The crisis is coming,” he stated.
Adams Adebayo, a Professor of Entrepreneurship Development and Lagos State chairman of the National Association of Small and Medium Enterprises, warned that the rising cost of diesel portends a serious danger for the economy.
He said, “The economy is in a serious shamble. It has never been this bad in the last 20 years. This is the worst that has ever happened. If diesel price has gone up, it has really affected everybody.
“What we are going to do now is that all the manufacturers would shut down. Except the government decides to subsidize the power and direct the electricity distribution companies to supply to the manufacturers at a rate being controlled by the government, there would be problems.
“The diesel price can go to N3,000, it doesn’t matter as long as the government’s energy is stable, we don’t need to buy diesel except those who are using it for logistics which would be affected.
“Before this administration came in on May 29, the diesel was sold for N670. Between June and today, 1st of November, diesel is N1,256. The small businesses are not finding it easy.
“The government needs to rise up to the task, set up a board to control all these essential commodities like fuel, diesel and gas because the gas too would be increased and households would not be able to use it again,” he said.