Nigerian manufacturers are being strangled by surging diesel prices, analysts say

By David Whitehouse
Posted on Tuesday, 26 April 2022 06:00

A diesel pump is pictured at a gas station in Lagos
A diesel pump is pictured at a gas station in Lagos, Nigeria September 10, 2019. Picture taken September 10, 2019. REUTERS/Temilade Adelaja

The doubling of diesel prices in Nigeria this year leaves the country’s manufacturing base fighting for survival.

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.