Telecom Industry Grapples With Soaring Diesel Prices As Costs Surge By 34.57%

Nigeria’s telecommunications sector faced a 34.57% surge in powering costs, reaching N429.43 billion in 2023, as diesel prices experienced an increase.

The ripple effect of economic challenges, geopolitical crises, and global oil market dynamics has intensified the struggle for telecom companies.

Telecom operators, grappling with a monthly average consumption of 40 million liters of diesel, lamented the impact on operational costs. In 2022, they sought a 40% tariff increase due to rising diesel expenses, a plea that remains relevant amid persistent challenges.

READ ALSO: Rising Cost: ALTON Seeks Upward Review Of Telcos’ Service Tariffs

Gbolahan Awonuga, Head of Operations at ALTON, emphasized the critical role of power in telecom operations, noting that despite increased expenses, tariffs remain unchanged.

President Gbenga Adebayo highlighted the need for pricing adjustments to reflect the industry’s current cost dynamics.

The House of Representatives received an appeal from telcos, outlining challenges such as inflation, currency devaluation, and insecurity, underscoring the urgency for a review of the pricing regulatory framework.

The surge in diesel costs, attributed to foreign exchange woes and global crude prices, has raised concerns about sustainability.

Oil marketers pointed to forex challenges as a significant factor, indicating a complex interplay between international market forces and domestic economic conditions.