MAN Warns of Consequences of Petrol Price Hike on Nigerian Economy

The Manufacturers Association of Nigeria (MAN) has expressed concerns about the negative impacts the recent increase in price of Premium Motor Spirit (PMS), popularly known as petrol from ₦568 per litre to ₦855 per litre will have on various sectors, including transportation, goods, and services, saying there is a high possibility of a rise in inflation figures, impacting household budgets.

According to a statement issued by Director General, MAN, Segun Ajayi-Kadir, mni, although globally there is an increase in crude oil prices, the nation’s refineries are not producing petroleum products and we are importing fuel.

Ajayi-Kadir highlighted that the increase in cost of crude oil have direct impact on the cost of importing fuel into Nigeria and expectedly, right from the time fuel subsidy was either reduced or removed, it became inevitable that the price may rise, leading to rise in inflation figures, higher transportation costs, increased prices of goods and services, and reduced disposable income for consumers.

He stressed that MAN is concerned about the impact on the already lacklustre performance of the manufacturing sector as this development will add to production input and logistics costs, thereby leading to higher prices in the face of dwindling disposable income of the average Nigerian.

DG MAN declared that this may result in unplanned inventory rising, reduction in capacity utilization, and negatively impacted manufacturing performance.

“Manufacturing performance would be negatively impacted. Businesses may need to adjust their pricing strategies, which could lead to reduced profit margins if consumer demand weakens. Small and medium-sized enterprises (SMEs), which often operate on thin margins, could be particularly hard-hit,” he added.

According to him, 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.