The Manufacturing Association of Nigeria (MAN) has warned that Nigerian manufacturers are set to face difficulties in production of goods as diesel price hits N730 per litre this week from a previous price of N625/N630 sold at some filling stations in the country last week.
Mr. Lanre Popoola, the Chairman, Manufacturers Association of Nigeria (MAN) in charge of Oyo,Osun, Ekiti and Ondo States, disclosed in a statement on Sunday, 13th March 2022 that the diesel price hike is really terrorizing the manufacturing sector as the manufacturers express their distress.
He therefore urged the government to intervene through palliatives to enable manufacturers to handle the costs.
What MAN is saying?
The Chairman, Mr. Popoola, in his exact words said, “It is getting extremely difficult to produce and I don’t know how we are going to cope because 70 percent of industries are running on diesel as the country fails in the supply of electricity.”
“There is no power supply, we are having 30 percent of what it used to be which is making us rely more on diesel generators for production, whereas, the disposable income of people is not increasing while the costs of products are going up.”
He mentioned also that “even in my factory, where I usually run three shifts of eight hours each, I now run just one shift per day.
He explained that many businesses are now currently running limited hours on diesel, as they cannot afford to use generators all day.
He cited another challenge by the manufacturers stating, “The diesel suppliers do not consent to installment payments by organizations, as the transaction is a cash and carry transaction as they too cannot predict the cost of the product.”
He further mentioned that Aside from manufacturers, transporters involved in the supply chain of both raw materials and food items from various geo-political zones now have their cost of logistics doubled by about 100 percent if not 200 percent.”
Keynotes
- The diesel product has no regulated body to determine the price as it fluctuates with the crude oil price cycle.
- Oil marketers under the guidance of the Major Oil Marketers Association of Nigeria (MOMAN) attributed this recent price hike in the diesel (Automatic Gas Oil (AGO)) to the difficulty in accessing foreign exchange and the ongoing war between Russia and Ukraine.
- As at 8 March 2022, Rate Captain reported the price surge of the diesel to about N625 per litre and explaining the effect it will pose on the economy.
