Diesel pump price jumps on the back of fuel scarcity
By Jeph Ajobaju, Chief Copy Editor
Diesel pump price has reached N640 per litre in some parts of Lagos on the back of petrol scarcity six weeks in a row, caused by the importation of adulterated fuel, a problem Muhammadu Buhari has run away from.
Escalating power supply blackouts worsen the situation by forcing businesses and households to buy more diesel and petrol to operate generators.
Buhari, who is both President and Petroleum Minister, travelled off to London on 6 March, two days after he returned from Nairobi, leaving Nigerians in the lurch to grapple with the aftermath of his incompetence.
He escaped to London for medical tourism – and plans to spend about two weeks – another consequence of his failure to upgrade health facilities at home, despite his promise to do so on the campaign trail in 2015.
The price of petrol is subsidised, that of diesel is not, because diesel is deregulated. But the scarcity of petrol puts pressure on diesel demand, plus naira depreciation adding to the cost of importation.
The price of Automotive Gas Oil (AGO), also known as diesel, varies between N625 and N630 per litre in some parts Lagos, and could be as high as N640 in other parts, a rise of 122 per cent above N288 in January.
The increase could be attributed to naira depreciation which has pushed up the cost of importing refined fuel and the surge in global crude oil prices stoked by the war between Russia and Ukraine.
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Hoarding
Some filling stations hoard diesel and claim they have run out of stock, others admit having it but refuse to sell, claiming their little supply is for special or credit customers, according to a survey conducted by Nairametrics.
The high cost of diesel is compounded by unstable power supply and sometimes outright blackout which has increased demand for diesel as industries, businesses, and households need to power their generators.
An attendant at Mobil station on the Lagos-Ibadan expressway said the price increased from N540 per litre last Saturday to N630 on Wednesday
A resident of Ogudu GRA, who confirmed the hoarding by some filling stations, said he bought diesel at N625 per litre in Ketu after retailers in the Ojota and Ikeja axis refused to sell to him.
MAN warns of further increase in goods prices
The Manufacturers Association of Nigeria (MAN) has warned consumers to expect further rise in the prices of goods and services because of the hike in diesel price.
“The rise in the price of diesel means higher production cost for manufacturers because most of us rely on diesel to produce,” a source in MAN Infrastructure Committee said.
“When the cost of production is high, then manufactured products will be sold at a higher price, this is to enable the manufacturer to make a profit after-sale and stay afloat.
“So basically it will increase inflation in the country which is already high, further compounding the problems and plight of Nigerians.”
Independent Petroleum Marketers Association of Nigeria (IPMAN) National Operations Controller Mike Osatuyi has also warned that the increase in oil prices on the international market would lead to hikes in diesel price in Nigeria.
