The Manufacturers Association of Nigeria (MAN) has expressed concern over the recent increase in the price of Premium Motor Spirit (PMS), commonly known as petrol, warning that it could lead to a significant rise in inflation, impacting household budgets and the broader economy.
The price of petrol jumped from approximately ₦568 per litre to ₦855 per litre on Tuesday, a change that has already been implemented across NNPC filling stations nationwide.
This sharp increase has sparked widespread reactions, with organized labor demanding an immediate reversal of the new price.
In a statement released on Wednesday, MAN’s Director-General, Segun Ajayi-Kadir, outlined the potential consequences of the petrol price hike.
He noted that the increase is likely to drive up transportation costs, which would, in turn, lead to higher prices for goods and services.
This escalation in costs could diminish consumers’ disposable income, reducing their purchasing power and leading to decreased demand for non-essential goods and services.
“These factors point to a high possibility of rising inflation figures, which would further strain household budgets,” Ajayi-Kadir warned.
He also expressed concern over the potential negative impact on the manufacturing sector, which is already struggling.
The increase in production input and logistics costs could result in higher prices for goods, further squeezing the average Nigerian’s dwindling disposable income.
This, in turn, could lead to a buildup of unsold inventory and a reduction in capacity utilization among manufacturers.
Ajayi-Kadir highlighted the challenges facing Small and Medium-sized Enterprises (SMEs), which often operate on thin margins.
“The increased costs could force some SMEs to scale down operations or even shut down if they are unable to pass on the additional costs to consumers,” he cautioned.
While explaining the reasons behind the petrol price hike, Ajayi-Kadir pointed to global factors such as the rising cost of crude oil and Nigeria’s reliance on fuel imports due to non-functional refineries.
He also noted the sharp decline in the value of the Naira, which has further exacerbated the situation.
“With the removal or reduction of fuel subsidies, it was inevitable that prices would rise,” Ajayi-Kadir stated, acknowledging the broader economic pressures contributing to the current situation.
