Reducing The Impact of Soaring Oil Prices on Nigerian Businesses

The world has witnessed in recent years, a series of events that have left and still leave economic woes and scars for many countries around the world. With the COVID pandemic leading up to the current war in Ukraine, many have been affected one way or another.

One of the impacts of such global events include the soaring price of oil as a result of inadequate demand meeting supply. The global shut down due to the pandemic necessitated a dramatic drop in oil production however there was a noticeable increase in 2021 as many countries started to come out of the lockdowns imposed to curb the spread. With the Russian invasion of Ukraine, the world was thrown into yet another crisis with price surges reaching $140 a barrel on March 7th 2022.

In countries like Nigeria where most business operators rely solely on diesel generators to run their operations, the impact has been felt badly. With the price of diesel soaring by almost 200%, rising from between N250/N300 per litre to as much as N750/N800 per litre, there are serious concerns from various quarters on the impact this will have on the survival of businesses.

Members of the Organized Private Sector (OPS), manufacturers, telecommunication providers, small and medium entrepreneurs and other operators across the sectors of the economy have sighted its imminent impact on economic growth with possible job losses and increased impoverishment of the people.
The Manufacturers Association of Nigeria (MAN), described the soaring price of diesel across the country as “very worrisome”. Also, Director-General, Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, said manufacturers who largely rely on diesel to power their factories were contending with huge costs to sustain their production line.

What then are the options open to business owners to check the effect of this power crisis? 
a) ALTERNATIVE POWER SOLUTIONS
Gas has been proven to be more cost efficient than diesel in running power generators. The gas generators have been proven to achieve 70% cost efficiency when compared to diesel generators, ensuring sustainable and affordable power supply that is long-lasting and non-polluting. As partners of MTU Onsite Energy and PERKINS GAS, Mikano International Limited sells, maintains and services gas powered generators to specific customers requiring cost-effective engines for a long period of time.
Mikano’s partnership with MTU Onsite Energy involves installation, commissioning and operation of large Independent Power Producing systems (IPP) in strict accordance with MTU’s high quality standards. We are currently running large- scale projects across the country; delivering uninterrupted power supply to our respective clients, at per-hour rating, with the potential of supplying any power capacity required. Our recent projects include installations for NNPC and JOTNA (17.2MW and 27MW respectively).

b) FUEL EFFICIENT POWER SOLUTIONS
Making good purchasing decisions of fuel-efficient generators can be a way of checking over-head production costs. Mikano International, as one of the renowned brands in the diesel generator sector, has continued to improve the output rating, efficiency and reliability of its power generation sets.
Mikano’s state-of-the-art YORC high-speed liquid fuel generators are characterised by high effectiveness and low operating costs. They deliver maximised performance and excellent fuel
consumption with a low environmental footprint in compliance with all emission limits. YORC generators are rugged, can tolerate harsh ambient conditions and has been proven to be 10% more fuel efficient compared to other diesel generators. 
YORC product portfolio includes a wide range of power capacities from 15KVA to 2,500 KVA and are capable of operating with a high level of flexibility. They can work autonomously and in parallel with other similar generator sets and mains. They come with an extensive warranty of 4-years or 3500 hrs.

c) EFFECTIVE AND EFFICIENT AFTER-SALES SERVICE PLANS
Servicing a generator requires routine checks of all its parts for wear due to usage, cleaning or replacement. Power Generators run on almost the same principle as cars; if their servicing is delayed the filter and oil get dirty resulting in higher combustion energy and fuel consumption.
One way to monitor and service your power generating set without stress is by signing a maintenance contract agreement with the company that sold the generator to you; that way they carry out maintenance checks on a regular basis.
Mikano is currently the largest assembler of power generating sets in West Africa, with offices in all the major cities in Nigeria, running excellent 24-hour support service centers established in over 20 branches in located nationwide.