The Centre for the Promotion of Private Enterprise has cautioned that the recent rise in energy prices could jeopardize the survival of Nigeria’s small and medium-sized enterprises if swift action is not taken.

In a policy brief on Sunday, the organisation highlighted that soaring energy costs are driving up business operating expenses, threatening the sustainability of the SME sector.

The CEO of CPPE, Dr. Muda Yusuf, noted that many Nigerian businesses are already grappling with challenging macroeconomic conditions, making the latest energy price hikes a serious concern.

CPPE warned that rising energy prices are exacerbating an already difficult business environment for companies nationwide.

“Businesses are already contending with multiple macroeconomic pressures including high inflation, elevated interest rates and weak consumer purchasing power.

“The latest escalation in energy costs therefore compounds an already challenging operating environment,” CPPE stated.

The organisation cautioned that rising operating costs could squeeze profit margins and threaten the sustainability of many SMEs.

CPPE warned that the recent surge in energy prices is worsening an already challenging business environment for Nigerian companies.

The organisation cautioned that rising operating costs could squeeze profit margins and threaten the sustainability of many SMEs, while also noting that the growing cost burden could slow broader economic growth if left unaddressed.

It stressed that SMEs are particularly vulnerable, as many lack the financial buffers needed to absorb sudden increases in expenses.

To cope with rising energy costs, the group advised businesses to review their pricing strategies carefully while remaining mindful of fragile consumer demand.

To navigate rising energy and operating costs, CPPE suggested that businesses:

Consider gradual price adjustments to reflect higher production and operating expenses.
Strengthen product value propositions to stay competitive in the market.

Introduce smaller product sizes or alternative packaging formats to manage price increases without losing customers.

Explore product redesign and enhanced value offerings to sustain demand despite higher costs.

It was earlier reported that the Petroleum Products Retail Outlets Owners Association of Nigeria urged the Federal Government to invest gains from the recent surge in global oil prices into Nigeria’s gas infrastructure.