• Tuesday, July 16, 2024
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Businesses, households groan as diesel prices jump 168% in one year

MRS pegs diesel retail price at N1050/Litre nationwide

The average retail price of Automotive Gas Oil, popularly known as diesel, paid by consumers increased by 168 percent in one year as businesses and households struggle with rising costs amid naira scarcity.

According to recent data from the National Bureau of Statistics (NBS), diesel prices rose year-on-year from N312 to N837 per litre in February 2023. On a month-on-month basis, it increased by 0.98 percent from N829 per litre in January.

Nigerian households and businesses are taking a beating as the rising cost of diesel and naira scarcity persist, coupled with a high inflation rate, pushing the cost of living higher.

Businesses have to increase the cost of their products to maintain their profit margin, while some households that use diesel generators have reverted to petrol generators to curb their expenses.

Dada Abayomi, who owns a printing press company that runs on diesel generators in Shomolu in Lagos, told BusinessDay that he has increased the cost of his products due to high diesel prices.

“Since the price of diesel has been increasing, I have no choice but to increase the price of some of my products. I lost some customers, but I would be at a loss if I did not increase my prices,” he said.

Amid this struggle, Abayomi still finds it difficult to get diesel from filling stations due to the naira scarcity. He said he has to go the extra mile to get diesel because not all filling stations in his area sell it.

Read also: Nigeria to remove petrol subsidy before May 29 — Finance Minister

In Abuja, Glorylanders International School had to switch to using petrol-fuelled buses as diesel pump price bites. Oluwakemi Ajagbe, the school’s proprietress, said the school needs help accessing diesel.

“Due to the increasing cost of diesel, we moved from using diesel to petrol for our school buses,” she said.

Akinsemoyin Micheal, who resides in Alakija, Satellite Town, Lagos, told BusinessDay that his family moved from diesel to petrol-fuelled generators. “We had to stop using our diesel generator when the diesel price got to N650 per litre last year. The generator was critical for powering heavy appliances like freezer and air-conditioner, but as the cost of diesel kept rising, we had to resort to a petrol generator,” he said.

Pedro Omontuemhen, partner at PwC Nigeria, said most businesses would have to carry the cost of operation to their customers to stay afloat.

According to him, businesses that fail to navigate the high cost of diesel, current naira scarcity and epileptic banking system effectively will be forced to shut down.

Looking at the variations in the diesel prices in states, the NBS said the states with the highest average product price in February 2023 include Bauchi (N904), Abuja (N885) and Adamawa (N873).

On the other hand, the lowest price was recorded in Bayelsa (N767), followed by Katsina (N779) and Edo (N789).

Analysis by zones showed that the North Central had the highest price of N850.65, while the South-South zone had the lowest price of N814.63.