THE EFFECT OF FUEL PRICE HIKE ON SMALL AND MEDIUM ENTERPRISES VIABILITY IN LOKOJA, NIGERIA.

Abstract

This study explores the effect of Fuel Price Hike on Small and Medium Enterprises Viability in Lokoja, Nigeria. Through a survey of 125 respondents, data was collected using primary data with the aid of a questionnaire. The findings reveal that the effect of fuel price hikes on operational costs of small and medium enterprises includes increased production costs, supply chain disruptions, lack of customer demand, difficulties in maintaining stable pricing for their products or services and increase transportation expenses. Similarly, findings of economic consequences of fuel price hikes on Small and Medium Enterprises include increased operational cost, challenges in budgeting & financial planning, strain profit margins and hinder investment decision & ability to expand. The identified results also highlight the complex interplay of various factors influencing fuel price hikes such as Global oil prices, exchange rate fluctuations, government policies, operational costs, inflation, and corruption all play significant roles in determining the extent of fuel price hikes in the country. The study recommends that Government should advocate for policies that stabilize fuel prices or provide subsidies for Small and Medium Enterprises. Also, Small and Medium Enterprises owners are encouraged to continue implementing adaptive strategies, including energy-efficient technologies and diversification of energy sources