Written by Omoh Gabriel, Business Editor & Hector Igbikiowubo, Asst. Business Editor  

The break down shows that in the telecom sector, N6.7 trillion is spent per annum to purchase diesel while filling stations spend N43.98 billion; factories N191.08 billion; banks N11.7 billion; insurance companies N80 billion; residential N7.812 trillion; and commercial enterprises, N1.57 trillion giving a total of N16.408,760 trillion or $140 billion expended on fuelling generators in the country annually.

This weakness imposes significant costs on economic activities and productivity in the country resulting in a prohibitive high cost of doing business which has made the country less attractive to local and foreign investors.

In an interview with Financial Vanguard, President of the Lagos Chamber of Commerce and Industry, Asiwaju Solomon Onafowokan, said the cost of powering production activities in Nigeria was prohibitive and had made locally-manufactured products uncompetitive even within the ECOWAS sub-region.

He said even if bank interest rates and charges were brought down considerably and the power issue was not addressed, the Nigerian business environment would remain largely uncompetitive.

He said the business community’s hope that President Umaru Yar’Adua would address the power issue frontally as he indicated during his campaign had been dashed with President demonstrating his inability to declare a state of emergency in the power sector.

The business community, according to him, is tired of waiting to know how the President intends to resolve the power problem in the country.

Owing to paucity of data from the Customs and Excise department, the Federal Office of Statistics, PHCN, the Standards Organisation of Nigeria (SON) and other government agencies visited,  Financial Vanguard discovered that generating sets utilised by this category of consumer range from 0.8Kva to 500Kva, depending on how many consumers it is meant to serve.

It was projected that most of those who have recourse to use generating sets are mostly urban dwellers and a few others in the rural areas. This amounts to 300,000,000 litres of petrol per day and at a current pump price of N70 per litre, N21 billion per day,  N651 billion per month, N7.812 trillion or $66.769 billion per annum.

Investigations revealed that there may be about five million commercial enterprises operating in the country including barber shops, hair dressing salons, restaurants, super markets, boutiques, block moulding factories, recording studios, dry cleaning services, night clubs, casinos, offices,  etc utilising an average of eight litres of petrol per day on different capacity of generating sets.

This translates to 40 million litres of petrol per day or 1.24 billion litres of petrol per month or 14.88 billion litres per annum. At current pump price, this translates to N1.57 trillion or $13.35 billion expenditure per annum. However, this does not include the cost of oil change, spare parts and labour.