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Small business owners in Lagos spend N5.3 trillion annually on fueling generators – Report  

Micro, small, and medium enterprise (MSMEs) owners in Lagos State spend a staggering N5.3 trillion annually on petrol and diesel to power their businesses through generators.

This is contained in a recent report by Sustainable Energy for All (SEforALL) which focuses on advancing the Energy Transition in Lagos State, and by extension, Nigeria.

The report conducted in partnership with the Lagos State Government reveals that the rising costs of fuel and generator maintenance are creating a substantial burden on households and businesses, stifling economic growth and development.

The study found that the generators used by these business owners consume approximately 6.6 billion liters of petrol each year, resulting in emissions totaling 17.8 million tons of carbon equivalents.

However, report reveals that 79% of the industries surveyed have reduced their usual operating hours following the federal government’s removal of the fuel subsidy.

Transition to Renewables  

Meanwhile, the report highlights a growing awareness of solar energy among businesses in Lagos, with 80% acknowledging its potential benefits.

However, despite this awareness, only 52% of micro, small, and medium enterprises (MSMEs) are open to exploring alternative energy sources such as solar power.

The recent subsidy removal on petroleum products has prompted many businesses to cut back on their generator usage to manage rising fuel costs.

Despite this shift, the report shows that only a small fraction—3% of these businesses—have made the transition to solar energy as a primary power source.

This suggests a significant gap between awareness and actual adoption, pointing to potential barriers that need to be addressed for wider uptake.

On the other hand, the report reveals a promising trend: 64% of businesses have shown interest in considering solar power as an alternative to traditional petrol and diesel generators.

This interest indicates that, with proper incentives, financing options, and awareness campaigns, the adoption rate of solar energy could improve significantly.

What you should know 

The push for renewable energy has gained momentum following the removal of fuel subsidies by President Bola Tinubu.

In response to rising petrol costs, the President also introduced a compressed natural gas (CNG) program, offering a more affordable alternative for fueling cars and other vehicles.

Among the renewable energy options, solar power stands out as a reliable solution, producing no carbon emissions or air pollutants, making it a cleaner energy source for the country

In March, the European Union (EU) announced a significant investment of €37 million in solar and hydro power systems. This initiative aims to improve energy access in healthcare facilities and rural areas across Nigeria.

Additionally, the World Bank has committed $750 million towards rural electrification projects, emphasizing the expansion of solar energy and other renewable solutions to enhance power availability in underserved regions. These efforts signal a growing focus on sustainable energy to address Nigeria’s evolving energy needs.


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