• Tuesday, July 23, 2024
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Plateau, Ebonyi, three others see biggest jump in diesel price

Diesel above N1,000/litre worsens businesses’ woes

Plateau, Ebonyi, Anambra, Ondo and Kebbi states recorded the biggest increase in diesel prices in July year-on-year, according to data from the National Bureau of Statistics (NBS).

BusinessDay’s analysis of the latest Automotive Gasoline Oil (AGO) price watch released by the NBS shows that diesel prices in the five states surged by 276 percent, 249 percent, 247 percent, 239 percent and 229 percent respectively.

The average price of AGO, popularly known as diesel, has increased by over 200 percent due to the Russia-Ukraine war.

Ayodele Oni, an energy law expert, said that there’s no subsidy for diesel, unlike petrol, which is why there are different pump prices across the country.

On the impact of distribution logistics, he said: “The farther away you are from the depot, the more expensive it is.”

“The forces of demand and supply dictate the prices in these states. In states where there is more demand, the price of diesel increases compared to states with lesser demand,” he added.

The energy law expert said factors such as insecurity can largely affect the prices across regions. “Issues such as unrest and social vices in these regions would allow for an inclusion of risk in price by suppliers willing to supply to such states.”

Read also: Firms consider switching diesel-powered telecom towers to solar power

Chinedu Onyegbula, an energy sector expert and director at Bullox Resources Limited, said access to some areas in these states in terms of transportation is poor, thereby increasing the price of diesel.

According to him, for places like Ebonyi, where population is really high with high commercial and industrial activities going on and poor power supply, the demand for diesel is high, leading to even higher prices.

The largest consumers of diesels across these states are manufacturers, which use it to power their generators due to poor power supply across the country. This surge has pushed up their cost of production.

Borno, Katsina, Benue, Taraba, Adamawa saw the least increase in diesel price. In Borno, a litre of diesel sold for N788.50 per litre in July from N290.38 in July 2021, up 172 percent year on year.