Diesel prices in Nigeria have skyrocketed, reaching an alarming N1,275 per litre in Lagos and soaring above N1,300 outside the state. This unprecedented surge, a 26 percent increase in less than a week, has raised concerns among manufacturers.
The ripple effects are feared to hit hard, potentially forcing factories to shut down and crippling small businesses already struggling in the face of a rising inflation crisis, according to Daily Trust.
Manufacturers, already burdened with forex challenges, high interest rates, and erratic power supply, are now facing an additional blow with the soaring diesel costs. Diesel, crucial for powering their factories, has become an unaffordable commodity due to the recent price hike.
The situation is particularly dire in Lagos, where filling stations have adjusted their prices to a range between N1,250 and N1,270. The impact is not limited to Lagos alone; even in Kano State, the price has climbed to N1,270 per litre, adding to the woes of manufacturers outside the metropolis. The escalating prices are hitting transporters hard, with a single trip between Kano and Lagos now requiring diesel worth a staggering N1.5 million, further escalating transportation costs.
Experts and industry insiders have voiced their concerns, highlighting the potential catastrophic consequences. The Chief Executive Officer of Golden Rice Mill, Ilya Nazifi, stressed that the rising diesel costs, coupled with logistics and power challenges, would inevitably lead to increased production costs and subsequently, higher prices of finished goods.
The President of the Premium Bread Makers Association of Nigeria, Emmanuel Onuorah, warned that factories might be forced to shut down, a move that could lead to widespread unemployment and economic instability.