In a startling development, diesel prices are set to surge to unprecedented heights, with an effective date of Saturday, August 12. Consumers in Lagos state will grapple with a staggering N867 per litre, while those in the Southwest region will be burdened with a price of N875 per litre.
This escalation comes as a shock, especially considering that diesel prices had been deregulated prior to the removal of fuel subsidies. The irony lies in the fact that despite deregulation, ex-depot prices have been on a relentless upward trajectory, driving the alarming spike in diesel costs.
Sources close to the situation revealed that ex-depot prices for diesel at the Apapa port have soared within the range of N790 to N820 per litre this week alone. These numbers starkly contrast the data shared earlier by the Major Oil Marketers Association of Nigeria (MOMAN). In a recent industry data sheet, MOMAN indicated that ex-depot prices for diesel at the Apapa port stood at:
- July 24 – N624 per litre
- July 25 – N638 per litre
- July 27 – N647 per litre
- July 28 – N653 per litre
- July 31 – N693 per litre
- August 2 – N649 per litre
- August 3 – N714 per litre
Equally notable is the revelation that MOMAN calculated the diesel prices during the same period as N650 per litre, using an exchange rate of 1 US dollar to N895.
The precarious state of Nigeria’s exchange rate only exacerbates the situation. Recent reports highlight a disturbing trend in the exchange rate, with the naira hitting an alarming N955/$1 on the black market. This comes after a turbulent week that saw the exchange rate plummet from N895/$1 to a historic low of N900/$1 on August 9.
The local currency’s 8% depreciation this month, driven by an insatiable demand that consistently outpaces supply, adds further fuel to the fire. Diesel, being among the petroleum products imported into Nigeria and procured in dollars, is particularly vulnerable to the fluctuating exchange rate dynamics, as evidenced by the escalating prices at the Apapa Hub.
The diesel price surge isn’t confined to specific regions. The National Bureau of Statistics’ June 2023 diesel price watch report points to a nationwide uptick. Diesel prices have soared to N899.23 per litre in Taraba state, N875.67 per litre in Adamawa state, and N873.33 per litre in Niger state.
A broader perspective reveals that despite some fluctuations, the average diesel price across the country has seen an overall increase. Data from the NBS indicates that the average diesel price was N815.83 per litre in June 2023, a modest 3.37% decrease from May’s N844.28 per litre.
This tumultuous scenario paints a vivid picture of the challenges that Nigeria’s fuel market faces, underpinned by the intricate interplay of exchange rate volatility, demand-supply dynamics, and regional variations. The ripple effects of these developments will undoubtedly continue to impact consumers and businesses alike, setting the stage for a complex economic landscape in the coming months.