Manufacturers have expressed concerns as the price of diesel has risen to N1,275 per litre in Lagos and above N1,300 outside the state.
The product is selling for N1, 270 per litre in Kano State and above that outside the metropolis.
This implies a 26 percent increase in the price of the product in less than one week. It had sold for N1,030 on October 23.
As of Thursday, many filling stations in Lagos adjusted their price to between N1,250 and N1,270.
Manufacturers, who said they are still battling with forex crisis, high interest rate and poor power supply, fear that the hike in the price of diesel might compound their challenges as diesel is used to power their factories.
The situation is amidst the rising inflation which peaked to 26.7 percent in October with many families and households facing a worsening cost of living crisis.
Stakeholders say the hike in the price of diesel portends greater danger for the masses who are bearing the brunt of high inflation.
A bakery owner, Ibrahim Nagode, said: “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.”
“We were planning to buy diesel yesterday and we have planned our budget on the rate we bought it the last time only to be told that the price is now N1,275,” said another source.
There are fears the pump price of diesel outside the Kano metropolis has reached N1, 400 per litre.
Commenting on the situation, the Chief Executive Officer of Golden Rice Mill, Ilya Nazifi, said inasmuch as logistics and power are affected, the cost of production and prices of finished goods would definitely go up.
A transporter in Lagos, Wada Jamilu, 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.
An oil marketer, Abdulrasheed Olapade, 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.
A professor of Entrepreneurship Development and Lagos State chairman of the National Association of Small and Medium Enterprises, Adams Adebayo, 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.