By Barnabas Esiet.
The Manufacturers Association of Nigeria (MAN) has expressed concerns about the negative impacts of the recent petrol price hike on the Nigerian economy.
The increase in price from ₦568 per litre to ₦855 per litre will have far-reaching consequences on various sectors, including transportation, goods, and services.
According to MAN’s Director General, Segun Ajayi-Kadir, the poor state of the nation’s refineries, which are not producing petroleum products, and the sharp decline in the value of the Naira, will further exacerbate the situation.
The association predicts that the increase in petrol price will lead to higher transportation costs, increased prices of goods and services, and reduced disposable income for consumers.
This, in turn, will result in reduced demand for non-essential goods and services, affecting businesses across various sectors.
The situation may also lead to a rise in inflation figures, impacting household budgets and deepening the already lackluster performance of the manufacturing sector.
MAN warns that the increased costs will add to production input and logistics costs, leading to higher prices and reduced consumer demand.
This may result in unplanned inventory rising, reduction in capacity utilization, and negatively impacted manufacturing performance.
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) could be particularly hard-hit, with some forced to scale down operations or shut down if they are unable to pass on the additional costs to consumers.
The association urges policymakers to consider the potential consequences of the petrol price hike and explore measures to mitigate its impacts on the economy and the manufacturing sector.
Comment here