Nigerian Residents and Business Owners Impacted by Souring Diesel Prices
By Opeyemi Solaru
Following the recent conflict between Russia and Ukraine, in conjunction with the unstable currency, prices in diesel are souring. Currently, the price of diesel has reached nearly N800, almost triple the cost of N300 at the beginning of the year. To make matters worse, the power grid collapsed, limiting the power distribution and forcing many Nigerians to rely solely on generators. Nigerians nationwide are groaning, and rightly so, as the cost of diesel has affected practically every sector of the economy.
Real estate companies are resorting to partnership with private power distribution companies with a higher fee to ensure consistent electricity coverage for its residents.This is a cost incurred by real estate developments that will ultimately be passed on to the residents. Some serviced apartments and estates have notified residents that they will no longer be able to provide electricity coverage 24 hours a day, and have advised that residents find alternatives in the event that there is no electricity.
According to Daily Trust, the President of the Premium Bread Makers Association, Emmanuel Onuorah, production may have to come to halt, as his generator, oven, mixer, and other equipment are all powered by diesel. Shop owners are finding it difficult to afford keeping their generators running throughout the day, with NEPA providing very little electricity during operating hours. Dr Muda Yusuf, former Director-General of the Lagos Chamber of Commerce and Industry, projects that not only will the price of finished products increase, but also food items, as they are delivered by trucks that run on diesel.
Michael Olawole-Cole, President of the Lagos Chamber of Commerce and Industry, recently warned that “if we are not careful the economy and Nigerians will suffer for it.”
Considering that Nigeria produces crude oil but ends up exporting it, just to import the refined version, it is evident that Nigerian leadership should prioritize maintaining and developing local refineries. For context, most countries in the Organization of Petroleum Exporting Countries (OPEC) import less than 20% of its refined petroleum products to meet domestic demand, whereas Nigeria imports 90–95%.
Many have identified the opportunity for Nigerians to consider alternative power sources, such as solar energy and renewable energy options. Natural gas is also a cheaper alternative, but it is not as accessible due to the limited network of gas distribution.
Uwana Energy, a community-member of Impact Hub Lagos, is an early-stage startup that provides affordable alternatives, in the form of a 500W solar-powered inverter box. They offer the option to pay in installments. Such solutions are a great alternative because it’s not only cost-effective, but better for the environment.