While petrol prices in Nigeria are subsidised, diesel prices are unregulated, so the impact of higher crude is immediate and unavoidable. According to research from Chapel Hill Denham, diesel prices are up 129% so far this year, and the firm forecasts that prices will end 2022 up 123%.
The cost of diesel has become a regular dinner-table topic, says Mickael Vogel, director at the Hawilti research group in Lagos. The only alternative in Nigeria is to use gas, but many smaller companies can’t manage the required capital expenditure, he says.
A lot of companies “don’t have the cash to buy diesel, but they don’t have the cash to switch to gas either.” Neither are they able to borrow from the banks, Vogel says. For some smaller manufacturers, layoffs are the only possible option. “Many manufacturers realise that they should have switched to gas already, and some are now having to lay people
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