Diesel may soon hit N1,500 per litre, marketers raise alarm

There is an uneasy calm in the country’s oil and gas sector over indications that price of diesel may rise from N800 to N1500. The Natural Oil and Gas Suppliers Association (NOGASA) gave the hint during a press briefing in Abuja. Prices of fuel, bread jerked inflation to 17.71 percent in May Wole Soyinka’s brother, […]

There is an uneasy calm in the country’s oil and gas sector over indications that price of diesel may rise from N800 to N1500.

The Natural Oil and Gas Suppliers Association (NOGASA) gave the hint during a press briefing in Abuja.

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According to the association, the cost of diesel will hit the roof if nothing drastic is done to curtail the current challenge faced by importers of the deregulated commodity.

The National President, NOGASA, Bennett Korie, said, “If you go round now you will see that about 75% of filling stations in Nigeria have gone out of business. There is no diesel to take fuel to their stations. All of them are going down.

“And it is not that the fuel is not there, but the cost of bringing it to the stations is too high. We know that the crisis between Ukraine and Russia has contributed badly, but the government has to do something fast, otherwise we are going to buy diesel in the next two weeks at N1000 to N1500/litre.”

He added that this was also the reason why petrol scarcity had failed to abate in Abuja and neighbouring Nasarawa and Niger states, among others.

“As far as I am concerned, nothing for now. The only way out, if you want to know, is that they (the government) should increase the price of fuel a little to reduce the money spent on PMS subsidy.

“I know Nigerians will not be happy to hear this, but this is the only solution. They should increase the price of fuel a little so that the savings will enable the Central Bank of Nigeria to have enough foreign exchange.

“You and I know that we import everything now in Nigeria. Diesel is an imported product and it is fully deregulated. So the importers are not getting dollars at the official CBN rate to import diesel. Everybody is going to the black market to get dollars to import their products and so you expect the price of diesel to be high,” he added.

According to Korie, if the government could bring down the rate at which it spends foreign exchange on PMS imports, this would help other businessmen who import diesel to bring in products at low prices.

He said, “The price is N850/litre and you are giving your driver 1,200 litres from Lagos to Abuja, if you do the calculation you will find out that the landing cost (for transporting the fuel) is about N40/litre.

“So if you add that to PMS, buying at the depot price and selling here, it is too high. So if your cost of bringing it in is at N40/litre and you bought it at N155/litre, when you add this you will get N195/litre. But you are to sell at N165/litre. So who will do that kind of business? It is already a loss-making business.”

Daily Trust reports that diesel price has increased by over 300 per cent and currently fluctuates between N700 and N800.