The rising prices of crude since the Russia-Ukraine war began, coupled with exchange rate instability in Nigeria, among others, have pushed up the prices of refined petroleum products across Nigeria.
Industry figures seen on Tuesday showed that the cost of Brent, the crude against which Nigeria’s oil is priced, rose above $133/barrel around 6pm Nigerian time. The commodity had traded below $90/barrel before the war in Ukraine started.
Oil marketers said that the rise in global crude oil prices had been pushing up the cost of Automotive Gas Oil, popularly called diesel; JetA1, otherwise called aviation fuel; as well as Premium Motor Spirit, also known as petrol.
Findings on Tuesday showed that diesel sold for between N550 – N625/litre in the few filling stations that dispensed the commodity.
“Unlike PMS, diesel or AGO has been deregulated and the price is basically determined by the cost of crude oil, foreign exchange rate and few other factors,” the President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, stated.
As a result of the increase in the prices of petroleum products especially diesel, the Manufacturing Association of Nigeria (MAN) on Tuesday said that Nigerians should expect higher inflation rates and a surge in the prices of goods and services as the cost of diesel rises.
Speaking on behalf of MAN, the Chairman, Infrastructure Committee, Ibrahim Usman, said the rise in inflation would be driven by higher cost of production for manufacturers who depend largely on diesel for production.
Usman said: “The rise in the price of diesel means higher production cost for manufacturers because most of us rely on diesel to produce. So 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 the inflation in the country which is already high, further compounding the problems and plight of Nigerians.”
He said that the government can prevent the expected consequences by providing adequate power supply across the country and offering discounts on electricity tariffs to manufacturers.
“To avoid these things from happening, the government should make sure that it creates a situation whereby the cost of electricity is reduced for manufacturers and that power supply is accessible to producers,” Usman said.