Manufacturers are expressing growing concerns as the price of diesel has surged to N1,275 per liter in Lagos and even higher, exceeding N1,300, in other areas outside the state. This price escalation signifies a remarkable 26% increase within less than a week, considering that it was selling for N1,030 per liter on October 23,Daily Trust report.
As of Thursday, many fuel stations in Lagos had already adjusted their prices to a range of N1,250 to N1,270 per liter. Manufacturers, who are already grappling with challenges like foreign exchange shortages, high interest rates, and unreliable power supply, fear that the spike in diesel prices will exacerbate their predicaments since diesel is essential for powering their factories.
This situation is occurring against the backdrop of escalating inflation, which reached a peak of 26.7 percent in October, leaving numerous households and families grappling with an increasingly burdensome cost of living.
Stakeholders are raising concerns that the diesel price hike poses a severe threat to the masses who are already grappling with the brunt of high inflation.
A bakery owner, Ibrahim Nagode, stated, “The price keeps increasing daily. You can buy it in the morning at one rate, and by evening, you are informed that the price has changed.”
Furthermore, there are concerns that diesel’s pump price outside the Kano metropolis has reached as high as N1,400 per liter.
In response to the situation, the Chief Executive Officer of Golden Rice Mill, Ilya Nazifi, emphasized that if logistics and power costs are impacted, the cost of production and prices of finished goods will inevitably rise.
A Lagos-based transporter, Wada Jamilu, highlighted that with the rising cost of diesel, a trailer’s fuel consumption for a trip from Kano to Lagos and back would now amount to N1.5 million. Consequently, owners of trailers would be compelled to increase their transportation fares.
An oil marketer, Abdulrasheed Olapade, pointed out that diesel has long been deregulated, and its price is influenced by the international market. He stressed that, currently, the price exceeds N1,275 at the terminal, and when transportation costs are factored in, it becomes even higher. The increasing value of the dollar has further complicated the situation.
Inuwa Abdullahi, a member of the National Association of Road Transport Owners (NARTO), lamented that the high cost of diesel has severely impacted the association. He explained that, due to multiple checkpoints by state and non-state entities, poor road conditions, and expensive spare parts, a trip that used to cost around N500,000 for a truck now amounts to approximately N2 million.
The President of the Premium Bread Makers Association of Nigeria, Emmanuel Onuorah, voiced concerns that the diesel price surge could force factories to shut down. As prices continue to rise, manufacturers find themselves compelled to increase their product prices to cover their mounting costs, leading to an economic crisis.
A professor of Entrepreneurship Development and Lagos State chairman of the National Association of Small and Medium Enterprises, Adams Adebayo, warned that the escalating diesel costs pose a grave danger to the economy. He emphasized the need for government intervention and control of essential commodities like fuel, diesel, and gas to alleviate the burden on small businesses and households.