The recent increase in petrol price from ₦568 to ₦855 per litre has sent shockwaves across Nigeria, sparking concerns about its far-reaching impacts on the economy.

According to Segun Ajayi-Kadir, Director General, of Manufacturer Association Of Nigeria (MAN), the reasons for the hike are not surprising, given the global rise in crude oil prices, Nigeria’s reliance on fuel imports, and the decline in the value of the Naira.

However, the consequences of this increase are dire. The cost of transportation and energy will rise, leaving consumers with reduced disposable income.

This, in turn, will lead to decreased demand for non-essential goods and services, affecting businesses across various sectors.

The manufacturing sector, already struggling, will face increased production and logistics costs, leading to higher prices and reduced consumer demand.

Small and medium-sized enterprises (SMEs) will be particularly hard-hit, with thin profit margins making it difficult to absorb the additional costs. Some may be forced to scale down operations or shut down entirely.

The ripple effects of the petrol price hike will be felt throughout the economy, leading to increased inflation, reduced consumer spending, and a decline in business performance.

As the nation grapples with the implications of this price increase, one thing is clear: the petrol price hike is a perfect storm for Nigeria’s economy, threatening to exacerbate existing challenges and hinder economic growth.