Fuel hike: Business owners panic, fearing closures and job losses

On Wednesday, members of the organized private sector expressed concern over potential business closures and job losses as a result of the increase in the pump price of Premium Motor Spirit, or gasoline, by the Nigerian National Petroleum Corporation Limited and fuel marketers.

The NNPCL and other oil marketers increased the price of gasoline on Tuesday from approximately N537/litre to between N617 and N630/litre. This move resulted in considerable outrage across the nation.

Francis Meshioye, president of the Manufacturers Association of Nigeria, commented on the situation and warned that the unpredictable nature of fuel price increases would have a major negative impact on manufacturers, who have had to reevaluate their budgets to account for the additional expenses brought on by the loss of fuel subsidies.

He claimed that the recent increase will add to the expense of logistics, which had already increased due to the rise in fuel prices.

He said that given the trend, manufacturers were concerned that this might not be the final rise and he encouraged the government to create a culture of involving important stakeholders before making choices with broad-reaching effects like this.

“When the fuel subsidy was eliminated, the majority of people believed that the shift would be temporary. If there was going to be any change, we didn’t anticipate it to be drastic.

“This signals to the business community that we should question whether this is the last increase. Some of our members have made an effort to adjust. This will render the budget we created meaningless. We’ve said it before and we’ll say it again: what happens when you find it hard to function?

What will happen if people can’t get to work and prices have to go up for consumers? Furthermore, where is the consumer’s actual purchasing power? Meshiye declared.

The Deputy President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, also spoke, warning that the rise in gas prices would bring about great difficulty for businesses, particularly in the near future.

Idahosa predicted, “There will be a lot of difficulty in the near future. Many tiny firms will entirely fail. The capacity for production will decline. Now, the topic of discourse is how quickly we can escape it.

Femi Egbesola, president of the Association of Small Business Owners of Nigeria, voiced concern on behalf of the organization that more companies will fail as a result of the harsher operating climate.

He claimed that raising the price of gasoline at the pump at a time when small businesses were already struggling due to the recent elimination of fuel subsidies was a “sledgehammer” that would destroy numerous SMEs.

It is a sledgehammer to tiny and micro companies, according to Egbesola. Just how will we manage to survive? I have to admit that I’m perplexed. The economy has been in trouble, but doing this would be suicide. I predict that many companies will fail. Small and smaller enterprises won’t be able to survive this, in my opinion. Many will fall.”

Segun Kuti-George, national vice president of the Nigerian Association of Small Scale Industrialists, also spoke out and claimed that the decision will put further pressure on companies already dealing with rising prices brought on by the government’s recent economic changes.

“There shouldn’t always be an upswing. It is predicted that the pump price will decrease if the price of oil on the global market declines. However, it’s unclear whether that will occur in Nigeria because “what goes up, stays there.”

Solomon Aderoju, the national vice chairman of the Nigeria Association of Small and Medium Enterprises, predicted that more companies would cease operations due to the exorbitant costs, which have been made worse by the spike in fuel prices.