With the cost of diesel rising from $0.75 (N312) per litre to $1.92 (N800), the price of petrol also skyrocketing, coupled with poor electricity supply, businesses in the country continue to suffer loss. Just recently, the Manufacturers Association Of Nigeria (MAN) raised an alarm over the negative impact of the skyrocketing price of petrol and diesel which is making it almost impossible for them to continue to operate.
They have appealed to the state and federal government to urgently come to their aid, as energy cost is currently gulping over 50 percent of their operating costs. Truth is, If the government dilly-dally on this issue rather than move into swift action, it can spell doom for the real sector which might see it collapse which will definitely lead to thousands of people losing their jobs. These negative outcomes have a ripple effect in the society, as high job loss will lead to an increased crime rate and insecurity in the country.
Chairman of Manufacturers Association Of Nigeria(MAN) Kwara/Kogi branch, Mr. Bioku Rahmon lamented that power which accounts for over 40 percent of factories costs, has now doubled with this major cost element, the cost implications in the overall cost outlay for industries have precipitated an alarming rise in the production costs, running costs and costs of transporting raw materials and finished products, all of which have now become more unbearable players in the country.
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Not only are businesses and manufacturing companies affected, banks are also not left out. According to sources, most banks in the country are beginning to cut down their banking service hours. Some had to send messages to their customers notifying them of the new closing time which is now 4 pm instead of the usual 5 pm closing time. This adjustment was made as regards the poor electricity power supply in the country and also due to the rising cost of diesel. Most of these banks are beginning to look for alternative energy sources such as Solar, as they strive to limit the impact of the skyrocketing diesel cost on their operations.
This period is indeed a challenging one for businesses in Nigeria, most especially SMEs, as they continue to accrue more losses than profits in their business due to lack of power supply and high petrol/ diesel prices. It’s an irony that a country like Nigeria, known as one of Africa’s biggest oil-producing countries, yet manufacturers and retailers are currently facing intense pressure and hardship from rising fuel and diesel costs, coupled with poor electricity supply.
Manufacturers are now faced with an escalation in the cost of production which will see the erosion of profit margins, and many businesses and companies will now have to face the risk of continuity. There is currently inflation in the price of goods, due to the high cost of production. Just recently Multichoice increased Dstv and Gotv subscription rates due to the ongoing inflation. The firm blamed “rising costs of inflation and business operations” for the increase. Also the price of sachet water commonly known as “pure water” has doubled across most states in the country. Things are really becoming unbearable for the masses as the standard of living in Nigeria continues to increase.
According to statistics, 12 in every 25 Nigerians make use of generators, spending about $16 million to fuel only 14 million generators annually. This is indeed painful and shameful for a country that calls itself the “giant of Africa”, but has failed to live up to the acclaimed name.
If a country like Ghana that doesn’t rank up to Nigeria in terms of natural resources and GDP can celebrate years of uninterrupted powers supply, then this is nothing but gross incompetence on the part of the leaders in Nigeria. Achieving efficient power generation and distribution of electricity in Nigeria has over the years remained a sore point and a major threat to the growth of the economy. It’s high time the government implements measures to put a halt to this incessant hike in petrol and diesel prices and also see to ensure that the country enjoys a stable power supply, because lack of these things will take a toll on the economy of the country which creates problems for the people, businesses, and manufacturers.