The Manufacturers Association of Nigeria (MAN) has expressed serious concerns about the recent increase in petrol prices, indicating that Small and Medium Scale Enterprises (SMEs) are expected to face significant challenges. MAN warns that many SMEs may be forced to scale back their operations or potentially close down.
In a recent interview with the News Agency of Nigeria (NAN), MAN’s Director General, Mr. Segun Ajayi Kadir, highlighted that the rise in petrol prices will lead to higher operational costs, particularly in transport and logistics. Businesses that are unable to pass these increased costs onto customers may find themselves in a difficult position, possibly leading to closures.
Ajayi Kadir also pointed out that elevated petrol prices could drive up transportation costs and increase the prices of goods and services, resulting in reduced disposable income for consumers. This decline in purchasing power might lead to lower demand for non-essential goods and services, affecting various sectors.
He also warned that these developments could exacerbate inflationary pressures, placing additional burdens on household budgets. He remarked, “Small and medium-sized enterprises, which often operate on narrow profit margins, are likely to be especially vulnerable. The increased expenses might compel some to reduce operations or even cease trading if they cannot pass these costs onto consumers.”
Ajayi Kadir stressed that the manufacturing sector is also expected to face adverse effects, with potential adjustments in pricing and reduced profit margins due to weakened consumer demand. He expressed concern over the impact on the already struggling manufacturing sector, noting that increased production and logistics costs will lead to higher prices and reduced disposable income for the average Nigerian.
