Yesterday, I had a humbling experience that made me reflect on the challenges small business owners face in Nigeria. I took my sewing machine to a repair shop, and the owner listed the parts that needed replacement. To my surprise, the cost of the parts had doubled since my last visit. The elderly repairman, who has always serviced my machine, explained the situation with a sigh. He shared that he now has to travel long distances to source materials, and the recent hikes in fuel prices have only made this more difficult and expensive.
I empathised with him, realising how the rising fuel prices impacted his business. This encounter prompted me to reflect on the broader struggles of small business owners, especially women entrepreneurs, who are navigating challenges like fuel scarcity and soaring costs.
As I left the repair shop, I stopped by a vendor selling clothing and sewing materials. After calculating the cost of my items, she firmly refused to lower the price, explaining that the recent fuel price hike had severely impacted her business. “It’s not my fault,” she said. Transporting goods to my shop has become so expensive that, after deducting fuel costs and the actual price of each item, my profit margin is almost nothing. It’s disheartening.”
Other customers chimed in, sharing their similar experiences. At that moment, my heart went to the countless entrepreneurs struggling to keep their businesses afloat amidst the fuel price crisis. Some have already closed shop, while others are on the verge of giving up.
Nigeria’s fuel scarcity has been a persistent challenge, and small business owners are bearing the brunt. The high cost of transportation, coupled with the increased cost of goods, is a toxic combination that threatens the very survival of their enterprises.
As I reflected on my encounter with the vendors, I couldn’t help but think about fuel scarcity, a persistent challenge in Nigeria. The recent price hike by the Nigerian National Petroleum Company (NNPC)has further exacerbated the situation. The new prices, ranging from N855 to N897 per litre, represent a significant increase from N568 to N617 per litre.
This hike has resulted in a substantial burden on small business owners, who are already struggling to cope with the economic downturn. According to a report by the National Bureau of Statistics (NBS) in May 2024, the transportation sector, which relies heavily on fuel, has seen a significant cost increase. The report states that the average cost of transportation has risen by 77% in the past year alone.
This increased ripple effect on the prices of goods and services, with many small business owners forced to pass on the costs to consumers. The fuel scarcity has also led to a decline in economic activity, with many businesses forced to reduce their operations or shut down temporarily.
In a statement from the Lagos Chamber of Commerce and Industry (LCCI), the fuel subsidy is unsustainable and has accumulated a debt of N10 trillion. Removing the subsidy would lead to a significant fuel price hike, causing widespread price increases and potentially high inflation. This would severely impact businesses, leading to higher costs, price increases, and job losses. The LCCI advocates for a more sustainable approach, supporting the development of additional local refineries to process crude oil for local consumption and potential export. Amidst the fuel scarcity and price hikes, NNPC has stepped in to address the situation.
However, the state oil firm has revealed that it is facing financial strain as it battles mounting debt to petrol suppliers, making it unable to import petrol into the country. This revelation comes on the heels of its recent announcement of record-breaking profits for 2023.
Despite these challenges, the NNPC has assured Nigerians that it is working to maintain a consistent supply of petroleum products nationwide. “We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” it said.
Regardless, the NNPC’s efforts must be more timely for many small business owners severely impacted by fuel scarcity. The company’s inability to import petrol has led to a fuel shortage, resulting in long queues at filling stations and skyrocketing prices on the black market.
Twitter comments
On X (formerly Twitter), Nigerians expressed frustration and disappointment, sharing their experiences and concerns about fuel scarcity and price hikes. @Joyforever tweeted:
Others, like @Lordpus, lamented the rapid increase in fuel prices, noting that it has skyrocketed by about 1000% compared to the previous administration:
Business owners are also feeling the pinch, with @amb_fegor tweeting:
Even everyday activities, like fueling a tank, have become a luxury as seen in a tweet by @kreamzy:
An X user, Charlotte Bwana, shared her experience of starting a call with her Nigerian colleagues, only to spend the first 20 minutes discussing fuel scarcity and price hikes:
Another X user, @thisisseyifunmi, shares her mother’s experience:
As the situation unfolds, many Nigerians wonder how the government will address its citizens’ concerns. The NNPC’s efforts to maintain a consistent supply of petroleum products nationwide may be too late for many small business owners who have already been severely impacted by fuel scarcity.
