Diesel Price Pushes Operating Cost as Telcos Seek FG’s Intervention 

Telcos

Telcom operators are seeking Federal Government intervention on the rising cost of diesel currently sold at 850/litre; and is expected to hit over 1000/litre in the next coming weeks, according to market analysts. 

Telcos rely on diesel to power network towers, base stations, and offices, and the current price is already adding to their operating costs.

The annual cost of powering telecoms services with diesel is now N360 billion having jumped by 233 percent in recent months to N30bn monthly.

Operators use an average of 40 million litres of diesel per month to power telecom sites.

According to the Nigerian Communications Commission (NCC), the operating costs of telecommunication companies in Nigeria rose from N1.4tn in 2020 to N1.66tn in 2021, showing an increase of N265.25bn.

TechEconomy understands that the scarcity of diesel in the country could be attributed to the difficulty in accessing forex from the CBN. The situation has led to importers going to the black market to source funds. The result is that the being an imported and fully regulated product, the selling price would be high.    

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However, the telcos under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) are worried that the situation has impacted negatively their operations.

Gbenga Adebayo, President, ALTON, said operators were struggling with the availability of diesel and the logistics of delivering it to sites and might have no other choice but to begin a process of price review.

He said, “Diesel is now very expensive, from N250 to over N700. All network planning, operational expenses, and planned projection for the year are based on the fact diesel prices. This has increased. Today, you know the implication of that. This is one problem; cost has gone up.”

According to Adebayo, operators will be approaching the government for some form of intervention. 

“But we are mindful of the high cost of living, and the implication of this on the economy and citizens. And so, we are not going to talk about direct price increases.

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“But we will be approaching the government for some kind of intervention to cushion the effect of these changes on us as an industry.”



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