NIGERIANS spend an astonishing $10bn annually on petrol and generator maintenance, according to a report by Sustainable Energy for All (SEforALL). This figure underscores the country’s heavy reliance on fossil fuels for electricity generation, despite its environmental and economic challenges.
The report, titled Beyond Gensets: Advancing the Energy Transition in Lagos State, was published in partnership with the Lagos State Government. It highlights how the high costs of fuel and maintaining petrol generators place significant strain on households and businesses, stifling economic development.
According to SEforALL, an average small business in Nigeria spends between ₦20,000 and ₦40,000 per month on fuel alone. This has become the largest operational cost for many small and medium-sized enterprises (SMEs).
Nigeria, despite being one of Africa’s largest economies, continues to suffer from an unreliable power supply, forcing both citizens and businesses to generate their own electricity. The report found that the cost of electricity from petrol generators is 83% higher than electricity supplied by the national grid.
In Lagos, the environmental impact of widespread generator use is severe, with diesel-powered generators contributing to an estimated 39 million tonnes of carbon emissions annually. This figure surpasses the total emissions of countries such as Rwanda, Gabon, and Togo. Lagos’ residential sector accounts for 21 million tonnes of CO2 emissions each year, while the commercial sector contributes 17.8 million tonnes.
The reliance on generators is largely due to Nigeria’s underperforming electricity grid, which, despite having an installed capacity of 13,014 megawatts, often operates below capacity due to inefficiencies and maintenance problems. The report estimates that Lagos alone has a generator capacity of 19 gigawatts, surpassing the national grid’s total.
With rising fuel prices, which recently reached ₦998 per litre in Lagos and ₦1,030 in Abuja, businesses are facing increased operational costs. The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has raised concerns that these price hikes will lead to higher transportation costs, inflation, and further economic hardship for SMEs.
SEforALL stresses the importance of transitioning to cleaner energy sources to address these challenges. Lagos State’s Energy Commissioner, Biodun Ogunleye, emphasised the need for the city to lead the nation’s energy transition, advocating for a shift towards more sustainable energy solutions to reduce the financial and environmental burden on Lagos and Nigeria as a whole.
NACCIMA has also called on the Nigerian National Petroleum Corporation (NNPCL) to support the Dangote refinery to stabilise fuel prices and reduce Nigeria’s reliance on imported petrol. In addition, NACCIMA urged the Central Bank of Nigeria to implement policies that strengthen the Naira to mitigate rising importation costs.
