Nigeria’s rising energy cost and prices of spare parts are threatening haulage business, with operators incurring more losses and struggling to break even.
The removal of petrol subsidies and naira devaluation have caused a further surge in prices of vehicle spare parts and diesel, thereby worsening truckers’ woes.
BusinessDay findings show that a year ago, diesel was sold at between N800 and N850 per litre, but it now goes for between N1,600 and N1,700, depending on the marketer and the state.
This represents a 100 percent increase in the price of diesel on a year-on-year basis.
According to the National Bureau of Statistics (NBS), the average retail price of Automotive Gas Oil, also known as diesel, paid by consumers increased by 39.11 percent on a year-on-year basis from N828.82 per litre in January 2023 to N1,153.01 per litre in January 2024.
On a month-on-month basis, the price increased by 2.34 percent from N1,126.69 in December 2023 to an average of N1,153.01 in January 2024.
Bala Mohammed, a haulage operator, told BusinessDay that the present economic headwinds are negatively impacting haulage operations amid dwindling imports and declined revenue arising from job scarcity at ports.
According to him, with diesel presently selling for between N1,600 and N1,700/litre, haulage operators can hardly make a profit.
“Truckers can hardly make any significant profit after paying for costly diesel,” he said.
Kazeem Olatunji, another trucker, said most truckers who are doing business in Lagos Ports are struggling to survive because the bulk of money charged for haulage is used to fuel trucks.
“If a truck breaks down on the road, area boys and LASTMA officials would aggressively impound them and give ridiculous bills to the owner,” Olatunji said.
He said that security operatives also mount multiple checkpoints for the collection of illegal tolls from haulage operators.
The high foreign exchange volatility and high customs duties are issues that have pushed many businesses into either reducing imports or closing up shop.
These issues are indirectly impacting the volume of business at the port and also hitting hard on truckers who rely on imports and exports to make a living.
In addition to rising energy costs, there is the impact of inflation on the haulage business which is evidenced in the surging prices of spare parts.
For instance, Yusuf Liadi, another trucker, confirmed that the woes of haulage operators have continued to pile up even as the economic headwinds make the business unattractive.
Liadi said soaring prices of truck spare parts is killing the haulage business particularly now that diesel has become an expensive commodity.
According to him, batteries, tyres, and every other vehicle parts are now expensive to buy and replace.
Citing an example, Bala Mohammed, another operator, said that a truck tyre, which was sold for around N100,000 each by this time in 2023, is now sold for N250,000.
He said: “A truck uses between 16 and 22 tyres meaning that it costs a minimum of N4 million to change the tyres of a container carrying truck at the present price. And with the bad roads everywhere, we hardly come back from job delivery without losing a tyre. Imagine where two tyres burst while delivering a job that one charged a price that is below N500,000. That is a total loss because the trucker would have to borrow money to buy another tyre.
“We are calling on the government to proffer a solution to the rising cost of energy for the progress and survival of the trucking business and also review import tariff on truck parts to cushion the effects of the rising cost of truck parts and enable truckers to meet up with the minimum safety standard.”
