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No end in sight as massive surge in diesel prices negatively affects truck drivers, exporters and consumers

13 May 2022
Reading time: 4 minutes

The depreciation of the naira and the surge in global crude oil prices caused by the Russia-Ukraine war has made doing business in Nigeria a very costly affair and could result in a loss of jobs, the closure of operations and much higher costs for commodities to consumers.

In January, the average price of diesel was ₦288.09 per litre. But in March, the price more than doubled.

The Federal Government approved a price increase to ₦555 per litre, but because it no longer subsidises the industry and prices are not fixed, the cost of a litre of diesel in the country’s 36 states can differ from state to state. And in most states the amount is more than ₦555.

In Borno State, a litre of diesel is now being sold at ₦720 or even more at some filling stations.

And now the Manufacturers Association of Nigeria (MAN) has warned Nigerians that they should expect a further hike in diesel prices, which would result in higher costs of goods and services.

The surge in diesel prices has severely hit the transportation industry in Maiduguri, the capital of Borno State.

Truck drivers and exporters told RNI that the recent hike was having a negative effect on their businesses.

Mohammed Ibrahim, a truck driver, said: “The increase in diesel prices has made life much more difficult for us. We used to buy diesel for ₦250 to ₦300 per litre and now that has more than doubled. We transport commodities from Maiduguri to Banki, Mubi, Damboa, Gambaro, Fotokol and other places outside the country, such as Chad, Niger, Cameroon and the Central African Republic, among others.

“Transportation costs about ₦200,000 and the exporters complain about the price but it’s not our fault,” he said.

The drivers said apart from the cost of diesel they also faced other challenges.

“Especially on the highways, security officials, such as the police, customs, soldiers and road safety and immigration inspectors, extort money from us. They refuse to allow us to pass unless we pay them anything from ₦1,000 to ₦3,000,” said Ibrahim.

Another truck driver, Ba Alai Bukar, said: “Before we used to carry loads or goods at a cost of ₦100,000 but because of the diesel hike, it now costs between ₦160,000 and ₦200,000. We carry loads to Kusuri, Multam, Mura, Banki, N’Djamena and Bangui, among other places, and we are no longer making a reasonable profit.

“Security officials often waste our time, saying they need to inspect what we are carrying. Sometimes they accuse us of transporting the diesel we have in reserve to Boko Haram. And they won’t allow us to go until we give them money. It’s unfair because they know that we carry reserve diesel for ourselves in case we run out of fuel. They know we travel long distances. But that does not stop them. They demand money before they allow us to continue.”

Alai Maina Bolori, an exporter, told RNI that the increase had severely affected transportation costs.

“Before the hike in prices, we used to pay truck drivers between ₦150 to ₦250 per bag. Now we have to pay them ₦1,000 per bag. The diesel prices are making doing business very expensive and we often run at a loss instead of making a profit.

“Even the cost of transporting goods from Maiduguri to Banki is high now. Before we paid about ₦100,000 but now we are paying anything from ₦180,000 to ₦200,000 naira. Despite this, we still supply goods to Baga, Banki, Gambaro and we export goods to Niger, Chad, Cameroon and the Central African Republic.

“One of the major problems is that because transportation costs are so high, the cost of commodities to consumers gets higher and higher. So we are losing customers, too. Something must be done about this because it is making it difficult to do business. We urgently need the government to intervene.”

SHETTIMA LAWAN MONGUNO

About the author

Elvis Mugisha