UNSTABLE electricity supply and rising fuel prices are placing significant strain on frozen food businesses in Lagos, as traders struggle to cope with higher operating costs and reduced customer patronage.
The traders, who spoke with the News Agency of Nigeria (NAN) in separate interviews on Wednesday, said the combined effect of unstable power supply and expensive fuel had increased their operating costs and reduced profit margins.
NAN reports that frozen food businesses rely heavily on constant electricity to preserve items such as chicken, turkey, fish, and other perishable products.
However, irregular power supply has forced traders to depend on generators, which run on fuel, thereby increasing operational expenses.
NAN reports that there has been a nationwide drop in power generation due to insufficient gas supply.
Consequently, the country’s power sector, largely dependent on gas-fired plants, has been hit by disruptions in gas supply worsened by pipeline maintenance challenges and liquidity constraints.
Mr Chika Oluehi, owner of Chika Frozen Foods at Ijora-Olopa, said he now factors electricity and fuel costs into his pricing to remain in business.
“Before now, a carton of turkey sold for about N85,000, but it now goes for between N105,000 and N110,000.
“A carton of chicken that used to sell for about N39,000 to N41,000, now sells for N46,000. We have to calculate our margins carefully to avoid losses,” he said.
Oluehi added that storage capacity determines how traders cope with electricity challenges.
“Suspending my frozen food business is not an option for me because of my storage facilities.
“When there is no electricity, we use fuel to power generators, but the generator does not fully carry the freezer. It only chills it and does not completely prevent spoilage,” he said.
Oluehi added that he had resorted to alternative energy sources to reduce losses.
“Where I live, I sometimes have light, and I also use a solar freezer. It helps, but it still depends on electricity, so, it is not a complete solution,” he said.
According to him, the rising cost of fuel also affects the transportation of frozen foods from suppliers to markets.
“When fuel prices go up and there is no power, we spend more transporting these frozen foods.
“Once fuel increases, prices automatically rise, and customers cannot buy as much as they used to.
“Imagine having 10 customers and five stop buying, while the remaining five reduce the quantity they purchase. The business will eventually suffer,” he said.
Another trader, Mrs Mojisola Kazeem of MJ Frozen Foods in Surulere, said she had temporarily halted selling frozen items due to the cost of fuel and electricity.
“I had to pause it. I cannot cope with the electricity situation and the cost of fuel.
“Hopefully, when things return to normal, I can pick up from where I stopped,” she said.
Similarly, a fish seller in Mushin, Mrs Bose Adeyemi, said she now reduces the quantity she stocks to avoid spoilage.
“Without steady electricity, keeping large quantities is risky. If light goes off and fuel is expensive, you may lose everything.
“I now buy in small quantities even though it reduces profit,” she said.
A cold-room operator in Agege, Mr Sulaiman Adebayo, said many traders now share storage space to cut electricity costs.
“Some traders cannot afford to run generators alone, so they rent space in cold rooms. But even cold-room owners are increasing prices because of fuel,” he said.
Adebayo noted that the situation had reduced customer patronage.
“Customers complain that frozen foods are too expensive. Many now buy smaller portions, and some switch to alternatives,” he said.
Mrs Yetunde Afolabi, a soft drink seller at Yaba Market, said poor electricity supply had affected her sales because customers prefer chilled drinks.
“People will not buy soft drinks when they are hot. Once there is no light, the drinks lose their chill, and customers walk away.
“Some of them even open the cooler, check the bottle, and drop it back when it is not cold enough.
“I spend money on fuel to run my generator, but I cannot keep it on all day because fuel is expensive. When I switch it off, the drinks become warm, and I lose sales,” she said. (NAN)
