Petroleum Products Price Hike and Survival Small-Scale Businesses in Lagos Conventional Markets

Abstract

Nigeria's persistent fuel price fluctuation poses existential threats to small-scale businesses that depend largely on petroleum products for transportation, power generation, and daily operations. Despite being a major oil producer, Nigerian economy experiences chronic fuel price instability due to subsidy removal, exchange rate fluctuations, and global oil market dynamics, disproportionately affecting the informal sector. Therefore, the main objective of this study is to examine the effect of fuel price hike on survival of small scale businesses in selected markets in Lagos while the Theory of Constraints and Theory of Practice guided the study. Descriptive research design was adopted using qualitative means of inquiry. Forty-five indepth interviews were conducted were conducted with small-scale business entrepreneurs across the three purposively selected markets in Lagos: Iyana-Iba, Badagry, and Lagos Island, representing semi-urban, border, and urban commercial environments respectively. Data collected were analyzed through thematic content analysis and verbatim quotations supported by Nvivo (14). The study found that fuel price hikes substantially increased operational costs, particularly transportation (up to 150-250% increase) and energy generation (up to ₦30,000 daily for refrigeration-dependent businesses). Income declined sharply as consumer demand shifted toward essential goods, with non-food businesses experiencing steeper sales reductions. Entrepreneurs adopted coping strategies including collaborative transportation, local sourcing for products, alternative energy adoption (solar, gas), and flexible pricing. However, these measures provided only partial relief. Businesses in semi-urban and border areas demonstrated greater vulnerability due to limited infrastructure and access to financial support. While small-scale businesses demonstrate remarkable resilience through adaptive strategies, the absence of targeted government support and infrastructural improvements limits their capacity to withstand persistent fuel price volatility and fluctuations. Policy interventions promoting affordable alternative energy, financial inclusion, and transport efficiency are essential for enhancing business sustainability in Nigeria's informal sector