Manufacturers mull closures, job cuts; seek government intervention
By Jeph Ajobaju, Chief Copy Editor
Oil marketers have explained foreign exchange (forex) volatility and a 7.5 per cent Value Added Tax (VAT) on diesel raised its pump price to between N900 and N950/litre across the country, depending on the location of purchase.
The diesel market is deregulation, which means the price will go up again, based on the forces of demand and supply on the international diesel market.
Manufacturers have jumped on this explanation to warn of looming factory closures and job losses.
Nigerian Textile Manufacturers Association (NTMA) Director General Hamma Kwajaffa said several textile manufacturers are thinking of shutting down operations because of rising costs, triggered largely by rising energy prices.
“Many are contemplating closing for now. We can’t meet up with that kind of amount. We have fewer than 24 textiles today, those who are working are contemplating closure. They have been pushed to the wall. These businesses are not in charity. They have to break even,” he said.
Coleman Technical Industries Chief Executive Officer George Onafowokan added increased diesel costs imply increased cost of production.
“Whenever the price of diesel goes up, it makes everybody’s costs go up. Logistics costs will go up for everybody, power costs will go up if diesel sells at N950.
“We are all in crisis. For most businesses in Nigeria, especially manufacturers, we are taking hits day in day out, and sincerely, the government needs to do better not only in giving palliatives to people, but for businesses that are employing them, especially manufacturers.”
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Oil industry players explain rise in diesel price
Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) National President Benneth Korie said inability to access United States dollars is impeding the importation of diesel, per The PUNCH.
He noted diesel cost N650 per litre before Abuja introduced a 7.5 per cent VAT on it in June.
“Diesel price is now approaching N900 to N950/litre depending on where you are buying it from. Before the introduction of VAT on diesel by the FIRS [Federal Inaldn Revenue Service], diesel was around N650/litre,” Korie lamented.
“This increase in price is also due to the scarcity of the dollars. The government has to intervene in this dollar situation.
“All bank CEOs, Central Bank of Nigeria and others must meet to address this dollar issue. The way it is going, it will destroy a lot of things for us if it is not controlled.”
Korie urged President Bola Tinubu to get Nigeria’s refineries working. He said the pressure by marketers and other importers on dollars would reduce when the refineries are back up and running.
“Our refineries were built by human beings and can be fixed by human beings. I believe Nigerian engineers can fix these refineries, instead of us depending on imports. This is not sustainable.
“We are pilling pressure on the very limited dollars in the country by importing petroleum products and other commodities. But once our refineries start working, this pressure will drastically reduce. The government has to fix our refineries.”
Korie also lamented the state of roads countrywide, citing the Port Harcourt-Warri road where about 500 tankers are currently trapped.
“For two weeks now our tankers have been on that road; you can’t cross it. Our roads are bad, our trucks trapped on the Warri-Abuja road for two weeks, our drivers are kidnapped and killed, while others suffer.
“Some of the roads are blocked. If the government does not fix those roads, then petroleum products will stop coming to Abuja and other locations across the country.”