Rising petrol and diesel prices are threatening to trigger a fresh increase in food costs across Nigeria, as farmers, traders, transporters and processors contend with higher expenses for moving, storing and processing agricultural commodities.
Petrol prices have risen to about ₦1,400 per litre in Lagos and Abuja and as high as ₦1,500 in parts of northern Nigeria, while diesel has climbed above ₦2,000 per litre. The latest increase has raised fresh concerns about the sustainability of recent moderation in food prices, with stakeholders warning that higher energy costs could gradually erase some of the gains recorded in the food market.
The development is particularly significant for agriculture, where fuel is required at almost every stage of the value chain, including land preparation, irrigation, harvesting, transportation, cold storage, milling, livestock production and processing.
At Mile 12 Market in Lagos, one of Nigeria’s major fresh-produce distribution centres, traders are already watching transportation costs closely.
A tomato seller at the market, Kazeem, said the rising cost of transporting produce was making it increasingly difficult for traders to maintain previous selling prices.
“Transport has gone up considerably. What we used to spend about ₦150,000 to bring tomatoes to Lagos can now cost close to ₦200,000, and we have no choice but to factor that extra cost into our prices. Even when the price of tomatoes comes down, transportation still makes it difficult for us to sell as cheaply as before,” he said.
The pressure comes even as tomato prices had recently recorded some moderation in Lagos markets. A September market survey put the price of a large basket of tomatoes at about ₦55,000, down from roughly ₦80,000 in July, although traders warned that transportation costs could affect further price reductions.
The same pressure is being felt in northern grain markets, where maize and other commodities travel long distances from production areas to consumers and processors.
At Dawanau International Grains Market in Kano, a major grain trading hub, maize trader Ali Adamu Jauro said transportation remained a major component of the final cost of grain.
“Fuel and haulage have become a serious part of what we spend before the maize even gets to the market. When transporters increase their charges because of fuel costs, we also have to adjust our prices. A bag of maize may be moderate in price at the point of purchase, but by the time you add transportation and other charges, the cost to the buyer is already higher,” he said.
For poultry producers, the impact is felt through both transportation and feed costs. A poultry farmer in Osun State said the increase in fuel prices was raising the cost of running generators, transporting birds and purchasing feed, particularly because maize forms a major component of poultry feed.
“Every week, we are spending more on diesel and petrol just to keep the farm running and transport the birds. Feed is also taking a bigger share of our expenses because maize and other ingredients are still costly. We can spend over ₦100,000 on fuel in a week, depending on the size of the farm, while a 25kg bag of feed can cost around ₦20,000 or more. We have had to increase our egg and broiler prices, but even with the increase, the profit margin is still very small,” the farmer said.
The situation could place further pressure on consumers already dealing with high food prices, as producers attempt to recover rising operating expenses.
The dairy sector is similarly exposed, particularly where farmers and processors depend on fuel for water pumping, milk collection, chilling, processing and transportation.
A dairy operator in Kaduna said the increase in fuel prices was adding to the cost of moving fresh milk from farms to collection and processing points.
“Fuel is now one of our biggest costs when moving fresh milk from the farms to collection and processing points. We have to spend more on fuel, and the higher transport charges are affecting what it costs to collect each litre of milk. At the end of the day, those additional costs have to be reflected somewhere in the price of the milk,” the operator said.
The cost pressure is also evident in the livestock and meat value chain.
At Oko-Oba in Lagos, private abattoir operator Salau Yeruwa has previously identified the high cost of petrol and diesel, alongside unreliable electricity supply, as major challenges facing meat operators. The latest increase could intensify the burden on abattoirs that depend on fuel for generators, water pumping, meat processing, refrigeration and other operations.
A meat operator at Oko-Oba said rising energy and transportation expenses were making it more difficult to maintain previous operating costs.
“Diesel and petrol costs have gone up, and that affects almost every stage of our work, from moving animals and meat. The cost of processing each animal has increased, and we now have to spend more per kilogram of meat before it even gets to the market. These extra costs eventually affect the price consumers pay,” he said.
Transporters are among the first actors to feel the impact of a fuel-price increase.
Imole Oyefunso, a commercial operator plying the Magboro to Obalende route in Lagos, previously said his fuel expenditure for five trips had risen from about ₦12,000 to ₦32,000 as petrol prices increased.
The development illustrates how higher fuel costs can quickly translate into increased charges for moving food from markets to consumers.
A produce transporter operating from Gbagi, Ibadan, to Akure in Ondo State said the latest increase was making it difficult for operators to maintain existing haulage rates. The impact becomes even more significant when produce is moved across state lines.
National President of the All Farmers Association of Nigeria, Farouk Rabiu-Mudi, has previously warned that rising transportation costs were placing severe pressure on the agricultural value chain. Mudi said haulage costs on major routes had risen from between ₦400,000 and ₦800,000 to as much as ₦3 million to ₦4 million per trip.
He also warned that increases in petroleum prices ultimately feed into agricultural production costs because farmers and businesses depend on fuel at several points in the value chain.
Lagos State Chairman of AFAN, Sakin Agbayewa, has similarly warned that fuel-price increases affect agricultural inputs, transportation and other farming activities, with implications for food security.
But the pressure does not end with transportation.
Processors that rely on diesel-powered generators are also facing higher production costs as diesel prices remain above ₦2,000 per litre. At rice mills, for instance, diesel is required to power machinery when public electricity is unavailable.
Bala Dayyabu, an operator of a major rice mill in Kano, previously said small-scale millers could spend about ₦700,000 monthly on energy, with high energy costs forcing some mills to operate below capacity.
A rice or maize processor contacted for this report said the latest diesel increase was making processing more expensive and could eventually be reflected in the price of milled products.
“We now consume significantly more diesel to keep the processing equipment running, and our monthly diesel bill has increased sharply. What we used to spend on fuel has gone up by tens of thousands of naira, so we have had to increase our processing charges to cover the additional cost. It is becoming difficult to keep our charges affordable while also keeping the business running,” the operator said.
The cost implications therefore extend across the food chain. For maize, higher haulage costs affect traders and processors.
For poultry, higher maize and transportation costs feed into the price of eggs and meat. For tomatoes and other perishables, higher transport costs are compounded by the risk of spoilage. For beef and milk, fuel is required at several stages, from livestock movement and water supply to slaughter, chilling and distribution.
Against this backdrop, the President of AFAN, Farouk Rabiu-Mudi, said the agricultural sector needed urgent measures to contain logistics and production costs if recent improvements in food supply and prices were to be sustained.
On his part, the Chairman of the Niger State chapter of the Christian Association of Nigeria (CAN), Most Rev. Dr. Bulus Dauwa Yohanna, who is also the Catholic Bishop of Kontagora Diocese, called on President Bola Tinubu to urgently address the cost-of-living crisis.
He made the comments during an interdenominational service in Minna marking Nigeria’s 66th Independence Anniversary, where he called for economic stabilisation and specifically said:
“We look forward to the drastic reduction in fuel prices, food prices, decline in inflation, a strengthened currency and growth of external reserves.”
He also said the government should translate economic reforms into practical improvements in people’s lives, including job creation, infrastructure development and reduced living costs.
Similarly, CAN President Archbishop Daniel Okoh called on the Federal Government to make lower food, transportation and energy costs a measurable priority. He argued that the success of economic reforms should ultimately be judged by whether ordinary families can afford food and experience meaningful improvements in their daily lives.
Meanwhile, the Federal Government has continued to promote increased domestic food production, mechanisation and agricultural value-chain investments as part of its efforts to improve food security and reduce food prices.
Agriculture and Food Security Minister, Abubakar Kyari, has said government interventions had contributed to significant reductions in the prices of some essential food commodities.
However, rising fuel prices could complicate those gains if farmers, traders and processors begin transferring higher operating costs to consumers.
The immediate concern, therefore, is not simply the price of petrol or diesel itself, but how quickly the increase travels through the food system. From the farm where irrigation equipment may require fuel, to the truck transporting produce, the cold room preserving perishables, the mill processing grains and the market trader selling to consumers, energy costs are embedded in the final price of food.
For consumers, this means that any sustained increase in fuel and diesel prices could translate into higher prices for tomatoes, maize, poultry, milk, beef and processed food products in the coming weeks.
The extent of the impact will ultimately depend on how much of the additional cost producers and traders absorb and how much they transfer to consumers. But with fuel prices already at record levels in several parts of the country, farmers, traders and processors are warning that another food-cost shock may be building beneath the surface.
