Small business owners have warned that the sharp rise in the price of diesel, on which they heavily depend for power generation, will lead to job losses in Nigeria.
From a January average of N288 per litre, diesel is now selling for over N800 per liter in Africa’s largest economy, impacting many sectors.
BusinessDay found that the significant increase in diesel prices has caused businesses, from private schools to cold stores, to suffer huge financial losses.
Companies are taking various measures to cushion the impact of high diesel prices on their operations.
“It is unfortunate that the price of the product keeps rising and nothing is being done about it. The high rate of inflation in the country means that people have less money to buy things, and when the prices go up and the masses have less money to buy those things, we’re going to have a lot of unemployment in the country,” Femi Egbesola, president of the Small Business Owners Association of Nigeria, said.
Esu Olumba-Obu, Group Managing Director of Royal Farms Ltd, described the high cost of diesel as a serious threat to the sustainability of the business.
“With the high cost of diesel, many businesses are now faced with the possibility of closing or laying off staff to survive,” Olumba-Obu told BusinessDay.
Olusola Majiyagbe, a staff member of Graceville Schools, Ikeja in Lagos State, said the school has decided to reduce the running hours of the generators by 50%.
“We run the generator four hours a day instead of 8 to 10 hours. In addition, we have installed solar energy to take care of the nights,” he said. “At night, we ask students to turn off air conditioners and use fans when they are on solar power. In this way, we were able to navigate our way around this disturbing development. »
While some private schools in Lagos are reducing the use of diesel generators, some have had to raise tuition fees to stay afloat.
For one administrator at Study Habit Schools in Okota-Lagos, the burden of running generators around the clock is unbearable.
The source said: ‘Study Habit schools operate an online learning system which makes it mandatory to run the generator until the end of school hours.
Also read: Telcos to factories: Nigeria’s diesel economy under threat
“Electric service providers are not helping matters due to the problem with the national grid. We hope the federal government will step in to save private school owners from the economic burden of running education centers in this ugly situation.
Some of the parents who spoke with BusinessDay revealed that they had received letters from their children’s schools indicating increased fees.
One of the parents lamented the increase, wondering how he was going to afford an almost 70% increase in tuition for his three children at a school.
The results show that the cold rooms powered by diesel generators increased the price of all frozen products they sell to consumers and outlets due to the increase in the price of diesel.
A consumer of the product identified simply as Kehinde said the price of frozen chicken has skyrocketed in recent months.
“I am currently buying a smaller size carton of frozen chicken at N21,000 as opposed to its old price of N15,000, or sometimes I am buying a larger size carton of frozen chicken at N25,000 which was previously at price of 17,000 naira.