The Manufacturers Association of Nigeria has expressed concern over the recent increase in petrol prices, highlighting that Small and Medium Scale Enterprises are likely to face severe challenges.
In an interview with the News Agency of Nigeria, the Director General of MAN, Mr. Segun Ajayi Kadir warned that the price hike could lead to significant operational cost increases, particularly in transport and logistics.
He indicated that businesses struggling to absorb these costs may be forced to reduce their operations or shut down entirely.
Kadir also noted that the rise in petrol prices is expected to drive up transport fares and the costs of goods and services, which could diminish consumer disposable income.
The Director-General of MAN cautioned that diminished purchasing power resulting from higher petrol prices could reduce demand for non-essential goods and services, impacting businesses across multiple sectors.
He also highlighted the risk of rising inflation, which could exacerbate financial pressure on household budgets.
Kadir noted that a decline in purchasing power could lead to lower demand for non-essential goods and services, affecting businesses across various sectors.
He further warned that this could trigger a rise in inflation, putting additional strain on household budgets.
He said, “Small and medium-sized enterprises, which often operate on thin margins, could be particularly hard-hit. The increased costs could force some to scale down operations or even shut down if they are unable to pass on the additional costs to consumers.”
Kadir highlighted that the manufacturing sector is likely to experience adverse effects from the petrol price increase, with businesses potentially needing to adjust their pricing strategies.
This could lead to reduced profit margins if consumer demand declines.
He said “words, “One is naturally worried about the impact on the already lacklustre performance of the manufacturing sector.”
“In particular, there is no doubt that it will add to production inputs and logistics costs. These will lead to higher prices and dwindling disposable income of the average Nigerian.”
On Tuesday, NNPC Retail stations nationwide raised the price of Premium Motor Spirit (PMS) from N617 per litre to N897, sparking widespread criticism among Nigerians.
This increase comes amid ongoing supply issues over the past month, attributed to challenges from the NNPC. Additionally, NNPC has rejected claims that a $6.8 billion fuel subsidy debt to oil traders is exacerbating the current supply problems.
