By Afolabi Hannah
Manufacturers have expressed concern over the soaring cost of diesel, which is used to power their operations. They claim that diesel now accounts for approximately 80% of their profits.
The Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, stated that manufacturers should not be held responsible for increasing product prices, given their high production costs.
However, some relief may be on the horizon for manufacturers following the recent 29.4% drop in diesel prices by Dangote Refinery. The refinery is now selling diesel at a significantly reduced price of N1,200 per liter, down from the previous market price of N1,700 per liter.
Commenting on the high cost of energy, Ajayi-Kadir said: “We have repeatedly urged the government and relevant agencies to take action to reduce these crippling operating costs in the country. Nigerians should not blame local manufacturers for raising product prices, as they are facing extremely challenging conditions.
“Can you imagine that diesel is currently consuming 80% of the profits of surviving manufacturing companies in Nigeria, at a price of around N1,700? How can manufacturers cope with such exorbitant energy costs and still be expected to keep product prices low?
“In addition, consider the new Customs exchange rate, the new interest rate, the scarcity of foreign exchange, the NAFDAC ban, and other factors. How are we supposed to operate profitably under these circumstances?”
It is worth noting that Dangote Group President Alhaji Aliko Dangote recently announced that his refinery is selling diesel at N1,200, below the market rate of N1,700. He expressed optimism that this significant price reduction will have a positive impact on inflation in Nigeria.
He said: “Many prices have increased. For example, locally produced goods like flour are now more expensive because manufacturers are paying exorbitant diesel prices.
“Our refinery has begun selling diesel at N1,200 instead of N1,700, and I am confident that things will continue to improve as we move forward.”
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