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By Adewale Sanyaolu
Except urgent steps are taken, about 39.65 million Micro Small Medium Enterprises (MSMEs) in the country may be go extinct in the months ahead over rising price of Automotive Gas Oil(AGO), popularly called diesel now selling for N625 per litre as at yesterday.
The N625 per litre price according to Daily Sun findings represents a 150 per cent increase over the N250 it was sold at most depots in Apapa barely one month ago.
The MSMEs figure is contained in a report jointly released by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS) in January 2022.
Further findings by Daily Sun revealed that the product sold for N350 per litre two weeks and N530 per litre last week Friday. The sharp increase in the price of the diesel may not be unconnected with the Russia-Ukraine crises which have left most ships conveying petroleum products stranded. Commenting on the development, the Chairman of Lagos State Hoteliers Association, Ifako Ijaiye and Ojokoro Local Government, Mr. Lawal Ganiyu Olusola, said the development remained a major setback for hoteliers, in the face of poor electricity supply to homes and businesses.
He lamented that the escalating price of diesel will force many entreprenuers out of business because more than 60 per cent of their operating cost goes into diesel fuel, leaving them with little fund to pay workers salaries even for the month of February. ‘‘When you purchase credit from DisCos, the unit value you get for a particular amount in a week will be different from what you get when you go for your next recharge. It has now become a case of the more you look, the less you see. We are at crossroads,’’.
Already, the effect soaring diesel price has started impacting transport and cost of food as operators say they cannot bear the burden.
Unfortunately, Nigeria has been cut in the web of the crisis as it relies mainly on importation of petroleum products due the comatose state of its four refineries located in; Port Harcourt, Kaduna and Warri with a nameplate refining capacity of 445,000 barrels per day.
Some officials at Apapa depot who spoke to Daily Sun in confidence said the price may hit N1000 per litre before the end of March.
They argued that diesel production from the modular refineries was grossly inadequate for local demand, saying infrastructure challenge poses another setback.
One of the depot representative who simply identified herself as Funmilayo, said the lack of pipelines from to convey the refined products from some of the modular refinery to depots in Lagos was a major disincentive.
‘‘ How many trucks will be lined up from the South-South or South East where some of these modular refineries are located to depots in Apapa. The quantity they produce may not just make economic sense to depots because it is just a drop in the ocean. I think the local market where the refineries are located will be better off. But still at that, diesel is over N500 per litre in those region,’’.
