Manufacturers are expressing growing concerns as diesel prices have risen to N1,275 per litre in Lagos, exceeding N1,300 outside the state, according to reports by Daily Trust.
Diesel is now selling for N1,270 per litre in Kano State, and higher prices are observed beyond the metropolis. This represents a 26 percent price increase in less than a week, as the product was selling for N1,030 on October 23.
As of Thursday, many filling stations in Lagos had adjusted their prices to be between N1,250 and N1,270. For manufacturers who are already grappling with forex crises, high-interest rates, and unreliable power supply, this diesel price hike poses a significant challenge as diesel is essential for powering their factories.
This situation comes at a time when Nigeria’s inflation rate has peaked at 26.7 percent in October, causing hardship for many families and households due to the rising cost of living.
A bakery owner, Ibrahim Nagode, shared his experience: “The price keeps increasing on a daily basis. You can buy it in the morning for a certain price and in the evening, you are told that the price has changed.”
With fears that diesel prices outside the Kano metropolis have reached N1,400 per litre, stakeholders worry about the impact on both businesses and ordinary citizens.
The Chief Executive Officer of Golden Rice Mill, Ilya Nazifi, stressed that the increasing cost of production and the prices of finished goods are expected to rise as logistics and power supply are affected by the hike in diesel prices.
For transporters, like Wada Jamilu in Lagos, the increase in diesel prices means that a trailer will consume diesel worth N1.5 million to travel from Kano to Lagos and back. This would force owners of trailers to raise their transportation fares.
Oil marketer Abdulrasheed Olapade noted that diesel prices have been deregulated and are determined by the international market. He added that the price is influenced by the world market, especially with the rising value of the US dollar.
Inuwa Abdullahi, a member of the National Association of Road Transport Owners (NARTO), lamented the impact of high diesel costs on the association. He pointed out that the combination of high diesel prices, multiple checkpoints, poor road conditions, and expensive spare parts have significantly increased operational costs for truck owners.
The President of the Premium Bread Makers Association of Nigeria, Emmanuel Onuorah, warned that the rising diesel prices could lead to factory closures, as manufacturers would be compelled to increase prices to cover their escalating costs.
Professor Adams Adebayo, a professor of Entrepreneurship Development and the Lagos State chairman of the National Association of Small and Medium Enterprises, raised concerns about the impact of higher diesel prices on the economy. He highlighted the need for government intervention to stabilize essential commodities like diesel and mitigate the adverse effects on small businesses and households.
