‘It’s A Terrible Situation’ – Bakers, Manufacturers Lament As Diesel Price Nears ₦2,000

The rising cost of diesel is putting more pressure on Nigerian businesses, with manufacturers and bakers warning that the situation could push up the prices of goods and deepen the country’s cost-of-living crisis.

Naija News understands that diesel prices have climbed to between ₦1,800 and ₦1,900 per litre in some parts of the country, with reports indicating that the product is approaching the ₦2,000 mark.

The development has raised fresh concerns among businesses that depend heavily on diesel to power generators and other equipment, especially amid unreliable electricity supply.

The Crude Oil Refinery Owners Association of Nigeria (CORAN) said urgent action was needed to prevent the rising diesel price from causing further damage to businesses and consumers.

Its Publicity Secretary, Eche Idoko, said diesel remained important to factories, farms, transport companies, telecommunications firms and several other businesses.

He warned that continued increases in diesel prices would raise production and transportation costs for manufacturers already dealing with a difficult business environment.

According to him, increasing domestic refining remains one of the best ways to address the problem, while Nigerian refineries must be given enough crude oil to operate at higher capacity.

CORAN Wants More Local Refining

CORAN said the Dangote Petroleum Refinery and modular refineries should not be seen as competitors, stressing that both were local assets that could help Nigeria reduce its dependence on imported petroleum products.

The association said Nigeria’s modular refineries have a combined installed capacity of about 35,000 barrels per day.

It is estimated that if the refineries operate at full capacity, they could produce between 2.2 million and 2.8 million litres of diesel daily, depending on their configuration and product yield.

CORAN added that the Dangote refinery reportedly produced about 19.1 million litres of diesel daily in July.

This means that combined domestic production from the Dangote and modular refineries could reach between 21 million and 22 million litres per day.

The association said the figures were important considering that Nigeria’s reported diesel consumption stood at about 14.7 million litres per day in July.

Despite the production potential, Nigeria imported about 244.9 million litres of diesel during the same month.

CORAN said the situation showed the need for the government to do more to support local refining and reduce the country’s dependence on imports.

It called on the Presidential Committee on Naira-for-Crude to guarantee adequate crude supply to the Dangote refinery and extend the arrangement to modular refineries.

The association also urged the Federal Government to establish commercially sustainable crude supply arrangements that would allow local refineries to operate closer to their installed capacities.

‘Situation Is Crazy’ – Bakers

While the association pushed for long-term solutions, manufacturers said the effect of the high diesel price was already being felt in their businesses.

President of the Premium Bakers’ Association of Nigeria, Engr. Emmanuel Onuorah, described the situation as extremely difficult for businesses, especially manufacturers that rely on diesel to power their operations.

Onuorah said diesel had become one of the biggest costs of production following the sharp increase in its price.

“The situation is crazy,” Daily Trust quoted him as saying.

According to him, diesel sold for about ₦800 per litre around the same period last year but now costs between ₦1,800 and ₦1,900, depending on the source and location.

He said the increase had pushed one of the major components of production costs up by as much as 150 per cent, making it difficult for businesses to know whether they were still making profits.

“For us, we don’t even want to look. I don’t even look at the books again. I just produce and sell. I’m not thinking of profitability; I’m thinking of, let us just remain afloat in the bakery,” Onuorah said.

He said the baking industry had received some relief from flour millers, who had not significantly increased their prices and had, in some cases, made minor reductions.

However, Onuorah said the relief had been cancelled out by the rising cost of electricity, power outages, alternative energy and diesel.

“It’s a terrible situation we are finding ourselves in. I don’t even mind. I just pity every manufacturer in Nigeria, no matter what you are producing,” he said.

Onuorah said the impact of the diesel crisis was not limited to business owners, as workers and households were also feeling the pressure.

He said the rising cost of transporting workers to their places of employment had added to the burden on employees who were already dealing with higher food prices, rent, school fees and other expenses.

He questioned how workers on fixed salaries could cope with the rising cost of living while businesses were also struggling to survive.

“A worker that has a fixed income and needs to go to work, the man wants to buy bread, he wants to buy a meal, he wants to pay school fees, he wants to pay inflated rent. How can that man survive?” he asked.

He added that employers were also under pressure and might not have the capacity to increase workers’ salaries.

Onuorah further warned that any fresh disruption in the international oil market, particularly from instability in the Middle East, could make the situation worse.

On his part, economic expert, Dr. Marcel Okeke, said the real sector would continue to suffer as long as energy costs remained high.

He said manufacturers were particularly affected because any increase in the price of refined petroleum products immediately raises their operating costs.

“The real sector, which is manufacturing, will continue to have the short end of the whole deal,” Okeke said.

Okeke said the problem was bigger than the manufacturing sector because many Nigerians and businesses still depend on generators due to inadequate electricity supply.

He described Nigeria as a “generator economy”, saying households, businesses and institutions were all affected whenever petroleum prices increased.

The economist also warned that the high cost of doing business was weakening Nigeria’s competitiveness and discouraging investment.

He said the country needed to create an environment that would attract and retain local and foreign investors instead of depending mainly on announced investment commitments.

According to him, the difference between announced investment deals and actual foreign direct investment showed some of the challenges facing the economy.

He noted that a large part of the capital coming into the country was foreign portfolio investment, which could leave quickly when investors’ expectations changed.

The concerns came shortly after the Manufacturers Association of Nigeria (MAN) raised the alarm over the declining performance of the industrial sector, Naija News understands.

MAN said the sector’s real growth nearly halved from 7.46 per cent in the second quarter of 2025 to 3.96 per cent in Q2 2026.

Its Director-General, Segun Ajayi-Kadir, said the decline was largely driven by the electricity, gas, steam and air-conditioning supply sector, which contracted by 10.63 per cent during the quarter.

“The drop in manufacturing’s contribution to GDP from 9.57 per cent to 7.72 per cent in a single quarter highlights severe cost pressure, a high exchange rate, outrageous interest rates and exorbitant electricity tariffs facing domestic manufacturers,” he said.

For businesses, the immediate concern remains survival as the rising cost of diesel adds to the expense of producing and transporting goods.

CORAN said the government must move beyond promises and ensure that more Nigerian crude is used to support Nigerian industries.

“Energy-sector reforms must wear a human face,” the association said, stressing that Nigerians should begin to benefit more from the country’s position as an oil-producing nation.