A running joke in Nigeria is that the middle-class Nigerian’s dream is to own an SUV and two backup generators. Yes, even your backup generator needs a backup generator.
As diesel prices have spiked and petrol scarcity every 2-3 business days, the middle-class Nigerian dreamer would be happy with a more fuel-efficient Toyota sedan and gladly swap one backup generator for a solar home system.
2022 has been a never-descending roller-coaster ride in terms of energy prices. Diesel prices practically tripled, and oil and gas production declined.
While individuals are affected, Nigerian businesses are also reeling from the impact—from Seplat to Dangote group and even SMEs.
However, the Nigerian National Petroleum Corporation (NNPC) is probably the worst hit as it’s impacted by low production levels and a high petrol subsidy price tag.
You see, 2022 has been one for the books regarding energy events in Nigeria. From record diesel price hikes to petrol scarcity, grid collapses, oil theft, and even cooking gas price spikes, the interconnectedness and depth of our energy problems have never been more apparent.
The poor state of our national grid necessitates using backup generators powered by diesel and petrol. But then, our domestic gas industry (which has also been affected by oil theft) is deeply intertwined with our shabby power sector—they’re so connected that it’s hard to tell where the power sector ends, and the gas sector begins. For instance, the power sector’s liquidity challenges spread to the gas sector, while the gas sector’s poor development means there’s not enough gas for electricity generation.
With prices of everything in Nigeria (especially dollars) spiking and oil production tanking (this should be a paradox), Nigeria’s energy situation is worsening. Earlier in the year, we showed the impact of higher energy prices on Nigerian households, but private companies are not exempt from Nigeria’s energy issues.
So, in nine charts, here’s how Nigeria’s 2022 energy crisis impacts many Nigerian businesses.