Diesel Price To Rise From N800 To N1,500 In Two Weeks

The Natural Oil and Gas Suppliers Association (NOGASA), Bennett Korie, said in the next two weeks, the price of diesel per litre will rise to N1,500 from N800, due to importers inability to access foreign exchange (forex) at Central Bank of Nigeria (CBN) rate.

Korie stated that the importers are left with no choice but to obtain forex in the black market, which has a higher rate, compared to that of the financial regulator. Explaining the impact, he disclosed that filling stations are shutting down due to this.

According to the head of NOGASA, about 75% of filling stations operating in the country have halted business. Korie said reducing the forex spent on importation of petrol will increase CBN FX availability for diesel importers.

“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.” Korie told the media in Abuja on Tuesday.

He added, “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.”

Increase petrol price

Korie suggested that the Federal Government should increase petrol price in a bid to reduce forex spent on fuel subsidy, “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.” Korie said.

The NOGASA boss explained further, “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.”