Many businesses are struggling to stay afloat, and some have shut down due to rising diesel prices, which has led to a reduction in their workforce to save money on labour.
Stakeholders in the industry who speak openly about the growing energy cost of diesel support the survey’s results.
Prince Saviour Iche, the head of the Association of Micro Entrepreneurs of Nigeria (AMEN) and the chief executive officer of Bright Future Hope Enterprises, remarked that this is the most difficult period for Nigerian business owners.
He pointed out that when the economy is bad, the moan of the nation’s business climate is more noticeable, exposing the prospect of corporate failure.
Iche revealed that power supply has been the bane of businesses in Nigeria, but the problem has taken a dire dimension with the nation’s electricity suffering repeated collapse recently and reduction of power generating, thereby shutting down production activities in the country.
He stated that, before now, he spent N208,000 per month on diesel, “but as of today, I am spending N650,000 every month.”
The AMEN Chairman also stated that a hike in the price of diesel is having a double effect on some businesses.
He added;
I got my raw material of plastic per truck for N680,000 before now; however, with the hike in diesel price, right now, I am loading a truck of the same quantity of raw material for N1.480 million, an increment of N800,000.
Stressing that this is killing the industry, he added that some entrepreneurs have closed down their factories and the few surviving ones are living on ‘life support’.
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He called on the government to help in finding a solution to this, saying, the ripple effect of this will result in job loss and increase the unemployment rate if factories continue to close down operations.
The price of a litre of diesel was N225 six months ago. Today, the same volume sells for more than N700, a 210 per cent increase in price.
The hunt for alternate and greener energy sources is linked to rising manufacturing operating costs this year, which were primarily driven by an enormous increase in the cost of producing electricity.
Previously, diesel was used as industrial fuel to generate electricity and power machines, but recent developments in the global oil market, which have seen diesel prices rise by more than 200 per cent this year, are causing manufacturers and businesses to reconsider their approach to alternative energy sources.
