The PUNCH had reported on October 7, 2021 that fuel marketers had increased diesel price to N320 per litre as the further rise in global crude oil prices and naira depreciation pushed up the cost of importing fuel into the country.
The price of diesel, which is not regulated by the government, has surged by over 40 per cent so far this year from an average price of N225 per litre in January.
Diesel is mostly used by businesses, especially manufacturers, to power their generators amid a lack of reliable power supply from the national grid. Many vehicles transporting goods and people across the country also use diesel.
Our correspondent observed on Thursday that several filling stations in Lagos had increased the price of the product to N350 per litre, up from a high of N340 last year.
Mobil, along the Lagos-Ibadan Expressway, and Northwest Petroleum, along the Oshodi-Apapa road, sold the product for N350 per litre on Thursday, while Heyden filling station, along Third Axial Road, Ogudu, sold it for N345.
Oando and Enyo filling stations, all along the Lagos-Ibadan Expressway, sold the product for N340 and N335 per litre respectively.
Crude oil price accounts for a large chunk of the final cost of petroleum products, and changes in oil prices affect the landing cost of imported fuel.
The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said in a telephone interview on Thursday that the recent increase in oil prices led to the further hike in diesel prices in Nigeria.
“If crude oil prices continue to rise, diesel price will also go up. This is coupled with the depreciation of the naira. Naira is around 570-575 to a dollar at the parallel market,” he added.
Brent crude, the international oil benchmark, climbed above $85 per barrel on Wednesday to its highest in more than two months. It stood at $84.72 per barrel as of 7:59pm Nigerian time on Thursday.
The Director-General, Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, Amb. Ayo Olukanni, noted last week that the private sector had already raised the alarm on the increasing difficulties of obtaining the required foreign exchange for raw materials for industry, adding that the high cost of obtaining forex was reflected in the high cost of goods and inflationary trend.
“Perhaps most embarrassing is the energy crisis, with our low generation and distribution problems; we can only boast of combined install generation capacity for of about 12,000MW, distribution of just 4000MW and abysmal 114kwh per capita for a population of over 200 million and running our industries on generators,” he added.
The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, had recently told The PUNCH that the surge in diesel price would increase the average cost of manufacturing in the country.
He had said, “All Nigerians depend on diesel. The reason is that manufacturers produce with diesel-powered generators; so, whatever they spend on diesel is added to the prices of their products. As far as Nigerians are buying those products, they are also paying part of the diesel price.
“It is unfortunate that the price of the product keeps increasing and nothing is being done about it. The high inflation rate in the country means that people have less money to buy things, and when prices are going up and the masses have less money to buy those products, we are going to have a lot of joblessness in the country.”
Nigeria, Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.