| dc.description.abstract | Small and Medium Enterprises (SMEs) are the backbone of Nigeria’s economy, accounting for about 48% of the national GDP and providing roughly 84% of employment opportunities, according to the National Bureau of Statistics (NBS) and SMEDAN surveys. However, the recent global energy shock triggered by the conflict involving Iran, the United States, and Israel and the disruption of shipping in the Strait of Hormuz has caused a surge in global oil prices and domestic fuel costs in Nigeria. The Strait of Hormuz crisis disrupted about 30% of global oil supply, pushing Brent crude oil prices above $100 per barrel in March 2026 and causing volatility in global energy markets. In Nigeria, the energy shock has translated into higher petroleum prices. As of March 2026, petrol prices rose significantly, with Dangote Refinery increased gantry prices to around ₦1175 per litre while diesel sells for ₦1620, while retail pump prices across the country ranged between ₦1, 230 and over ₦1,300 per litre depending on location and supply conditions. Energy is a critical input for SMEs, especially in sectors such as manufacturing, agro processing, transportation, retail, and services. Rising fuel prices increase operational costs, reduce profitability, and force many small businesses to either reduce production, increase prices, or shut down operations.
Although the Nigerian National Petroleum Company Limited and the Dangote Refinery had graciously reduced the petrol and diesel price by ₦100, with the PMS now selling between ₦1075 to ₦1230 per litre, energy cost still poses a great impact on SME’s in Nigeria given that the PMS as at January 2026 was sold around ₦980 per litre depending on location, the increase has added production cost on enterprises.
Addressing the impact of rising energy cost on SMEs and providing solutions aimed to protect the SME sector and sustain economic growth, the National Assembly may consider the following recommendations:
✓ The Senate Committee on Industry and the House Committee on Small and Medium Enterprises, through its oversight function, may wish to legislate a targeted energy stabilization fund for SMEs to cushion the impact of rising fuel prices.
✓ Legislative reforms may prioritize investment in electricity infrastructure to reduce reliance on fuel-powered generators. | en_US |
