The Manufacturers Association of Nigeria (MAN) has decried the constant increase in the price of Automated Gas Oil (AGO), popularly known as diesel.
It stated this in a statement issued by the Director-General of MAN, Segun Ajayi-Kadir and made available to The Trumpet in Lagos, maintaining that the Russia-Ukraine crisis had impacted negatively on the country’s real sector.
He stressed that if not curtailed, the current price of the product and constant hike could collapse the country’s business sector due to the lack of stable power supply.
“Global events have shown that the world is like a village. The emergence of challenges in one country can become a major constraint with spiral effects for the world. Oftentimes when disruptions occur in any part of the global economy, only countries with functional institutions and strong internal economic mechanisms will be able to respond appropriately to such external shocks.
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“The current increase in prices of crude oil and other refined petroleum products such as diesel is one of such disruptions occasion by external shocks that confirm the interconnectedness of global economies. No doubt, the recent short supply and over 200 per cent increase in the price of diesel are part of the backlash of Russia’s invasion of Ukraine,” the statement reads.
It said MAN was greatly concerned about the implications of the over 200 per cent increase in the price of diesel on the Nigerian economy and especially the manufacturing sector, adding that more worrisome was the deafening silence from the public sector regarding the plight of manufacturers.
“Should manufacturing companies that are already battered by multiple taxations, poor access to foreign exchange and over 200 per cent increase in the price of diesel be advised to shut down operations? It asked.
In the short-term, the disruptions occasioned by Russia’s invasion of Ukraine would continue to impact the global energy space and upset the supply of petroleum products, thereby causing persistent increases in the price of refined petroleum products including AGO.
The MAN lamented that in the long run, the development would further result in enormous increase in the prices of other manufacturing inputs like wheat, maize, fertiliser and other raw materials.
It maintained that the implementation of the sharp increase in the price of diesel on the manufacturing sector include exertion of untold hardship on the manufacturing sector leading to the closure of several business outfits and reduction in capacity utilisation, further decline in Gross Domestic Product (GDP), unemployment in the 76 sub-sectors of the association and increasing crime rate.
“There will be further decrease in foreign exchange from the manufacturing sector, as high cost of production impact export commodity prices. It will also lead to a sharp reduction in government tax revenues occasioned by the drop in sales, lower profitability, as lesser quantum of disposable income will be available to purchase manufactured goods,” the statement added.
