Fuel price hike: NACCIMA warns of impending economic crisis

The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has expressed alarm over the recent surge in petrol prices, which have skyrocketed to N998 per litre in Lagos and N1,030 in Abuja.

Dele Oye, the national president of NACCIMA, issued a statement on Wednesday highlighting the detrimental impact this increase is having on businesses, households, and the broader Nigerian economy.

Oye cautioned that the escalation in petrol prices is driving up transportation costs, further exacerbating inflation and placing immense pressure on small and medium-sized enterprises (SMEs) that depend heavily on petrol to power their operations.

He pointed out that the rise in fuel prices will not only inflate transportation and freight costs but will also increase the prices of goods and services, intensifying the financial burden on consumers.

“Transportation costs are directly tied to fuel prices, and this increase will inevitably lead to higher freight charges,” Oye stated.

“Since petrol is a key driver of inflation, the surge in prices will deepen the already high inflation rate in the country. Households will face not only higher fuel costs but also increased prices for everyday necessities, triggering a vicious cycle of economic hardship.”

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Oye emphasized that SMEs, particularly micro and nano businesses reliant on petrol generators for power, would be disproportionately affected.

The fuel price hike could force many small enterprises to pivot from growth strategies to mere survival, limiting job creation and stalling economic development across communities.

Economic analysts echo Oye’s concerns, warning that the continued rise in fuel prices could lead to broader economic instability.

“Higher fuel costs will inevitably be passed on to consumers, leading to a decrease in purchasing power and increased hardship for many households,” said Dr. Ifeoma Okonkwo, an economist at the University of Lagos.

“This situation may deter investment in small businesses and could lead to a further contraction in economic growth.”

In response to the crisis, NACCIMA has called for immediate action from both the Nigerian National Petroleum Company (NNPC) Limited and the Central Bank of Nigeria (CBN).

Oye urged NNPC to provide support to the Dangote Petroleum Refinery, which is anticipated to stabilize local petrol prices and reduce Nigeria’s reliance on imported fuel.

He also stressed the necessity for the CBN to implement more effective monetary policies to stabilize the naira and mitigate inflationary pressures.

“As stakeholders, NACCIMA is committed to engaging with government entities to advocate for strategies that stabilize fuel prices and bolster domestic production capabilities, ensuring the Nigerian economy can weather these challenging times,” Oye concluded.

He warned that as importation costs rise due to currency depreciation, domestic petrol prices could continue to escalate, further straining the economy.

The ripple effects of these price increases may lead to broader implications for Nigeria’s economic stability, requiring urgent government intervention to prevent a full-blown crisis.