As the prices of crude oil continues to soar high in the international market, the prices of its finished products such as Premium Motor Spirit (PMS), popularly known as petrol, Aviation fuel, Kerosene, Diesel and others continue to witness corresponding increases in their prices.
The recent increase has however led to another adjustment in prices of diesel in Nigeria as the local marketers has pegged the new price of Automotive Gas Oil, also known as diesel, to a new high of N265 per litre.
E247 reports that the international oil benchmark, Brent crude, had risen above the $70 per barrel mark on March 8 for the first time in over 14 months from the $51.22 per barrel at which it closed last year. It stood at $64.43 per barrel as of 7:03pm Nigerian time on Monday.
The Crude oil price accounts for a large chunk of the final cost of petroleum products, and the deregulation of the downstream oil sector by the Federal Government means that the pump prices of the products will reflect changes in the international oil market.
However, some Filling Stations in and around Lagos has already reflected the new pump price of diesel while the prices ranges from their categories of either a major marketer of independent marketer.
The prices ranges between N248 and N265 per litre while some are selling between N220 and N245 per litre.
On the recent increase, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, said that the prices of diesel and kerosene had been increased because of the rise in crude oil prices.
“Marketers are importing diesel because it has been deregulated and the pump price is based on the current crude oil prices. We get foreign exchange from the black market to import the product,” he said.
Diesel is mostly used by businesses to power their generators amid a lack of reliable power supply from the national grid.
The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, lamented that the recent increase in the price of diesel was taking a heavy toll on businesses, especially Small and Medium Enterprises.
“The cost of diesel and raw materials is giving us a nightmare. The price of diesel has been skyrocketing in a way that creates fear in manufacturers,” he said.
According to him, it is difficult for businesses to factor all the increase in diesel price in their final product prices.
Nigeria, the Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.