Small and medium-scale enterprises (SMEs) across Abuja are raising alarm over rising fuel costs, warning that the situation is driving up operating expenses and worsening the cost-of-living crisis.
Business owners say the persistent increase in petrol prices has eroded profit margins and weakened consumer purchasing power.
The concerns were gathered by Nairametrics from interviews with business operators across key parts of the Federal Capital Territory, including Mararaba, Nyanya, Apo, Wuse, and Kubwa.
The development reflects a broader trend where rising fuel prices continue to impact transport fares, food costs, and service delivery.
Experts warn that the situation could trigger a deeper inflationary spiral, particularly affecting SMEs that operate on thin margins and lack financial buffers.
What they are saying
SME operators across Abuja say rising fuel prices are squeezing both their businesses and their customers, forcing difficult trade-offs between pricing and survival. Many say they are increasingly dealing with reduced demand and rising input costs.
- “Things are really hard. Even workers are complaining bitterly. Most of them are just eating on credit now. If I increase the price of my food, many of them won’t come again,” said Madam Grace, a food vendor in Mararaba.
- “Customers now ask for half portions. Some will say, ‘Mama, I will balance you tomorrow.’ But tomorrow again they are still struggling,” said Aisha Sule in Nyanya.
- “From Nyanya to Area 1 before was N700, but now we will be lucky to get someone to pick you for N1,000,” said spare parts dealer Benjamin Onah in Apo.
- “I spend about N5,000 to N10,000 daily on fuel alone. Sometimes what we make in profit goes back into buying fuel,” said POS operator Chinedu Okeke in Wuse.
- A tailor in Garki, Esther Daniel, said customers are delaying non-essential spending.
- “Before, people would sew clothes for occasions ahead of time. Now they say they will manage what they have. Some even cancel orders,” she said, noting that sewing a complete outfit has risen from N8,000–N10,000 to about N15,000–N18,000 due to higher material and electricity costs.
Operators say the rising cost of fuel is affecting everything from food production to transportation and basic financial services.
Backstory
Nigeria has experienced repeated increases in petrol prices following the removal of fuel subsidies and ongoing volatility in global oil markets. These changes have led to higher transportation and logistics costs across the country.
In Abuja, where many SMEs rely on generators due to unstable electricity supply, fuel costs play a critical role in daily operations. The ripple effect has been felt across sectors, as businesses pass on rising costs to consumers or absorb losses to remain competitive.
Over time, this has created a challenging environment for small businesses, which form a significant part of Nigeria’s economic activity and employment base.
More Insights
Transport fares across major Abuja routes have surged significantly in recent weeks, reflecting the direct impact of rising fuel prices.
- The Lugbe–Central Area route has increased from about N800 to an average of N1,200.
- Nyanya–Wuse routes have risen from N700 to as high as N1,100 during peak periods.
- The cost of transporting goods from Lagos to Abuja has jumped from about N30,000 to between N40,000 and N80,000.
- A mini supermarket owner in Kubwa, Tunde Adebayo, added that customers now buy items in smaller quantities.
- “Instead of buying a full crate of drinks for N6,500, they buy one or two bottles. Instead of buying a big bag of rice, they buy it in paint buckets,” he said.
Economic experts say these increases are fueling cost-push inflation, where rising production and logistics costs lead to higher prices for goods and services. SMEs are particularly vulnerable, as they often lack access to credit and cannot easily absorb shocks.
Analysts warn that sustained increases in fuel costs could lead to business closures, job losses, and reduced household income if not addressed.
- According to Dr. Uche Okpala of the University of Abuja, rising fuel prices increase production and transportation costs across the board.
- “When fuel prices increase, transportation and production costs rise across the board. SMEs, which operate on thin margins, are usually the hardest hit,” he explained.
- Dr. Anaele Julius of Kwik Securities noted that SMEs face greater risks because they lack financial buffers and struggle to pass rising costs to consumers.
- “Most small businesses cannot easily access credit or hedge against volatility. When costs rise, they either pass them on to consumers or absorb losses. In a weak demand environment, passing on costs becomes difficult,” he said.
- Business owners report declining demand, with customers buying smaller quantities or postponing non-essential spending.
SME operators are calling for urgent government intervention, including improved electricity supply, more efficient transportation systems, and policies to stabilize fuel prices, as many warn that continued pressure could force small businesses to shut down
What you should know
Last week, Nairametrics reported that prices of food items, goods, and services have surged across markets in the Federal Capital Territory, as rising fuel costs linked to the Middle East crisis continue to ripple through the economy.
- Nairametrics also reported that residents of the FCT have raised concerns over rising transport fares following the recent increase in the pump price of petrol nationwide.
- As Abuja’s SMEs grapple with mounting fuel-driven costs from higher rice and gas prices to transport fares and generator expenses, their struggles underscore a broader economic reality: when energy prices rise, the smallest players often feel the biggest pain.
