Soaring Diesel Price Threatens Industries and Households
The price of diesel in Nigeria has surged significantly, causing concern among various sectors, particularly manufacturers and transportation companies.
In Kano State, diesel is selling for N1,270 per litre, representing a 26% increase in less than a week. This price surge is affecting other parts of the country as well, with many filling stations in Lagos now charging between N1,250 and N1,270 per litre.
Manufacturers in Nigeria, who are already grappling with foreign exchange challenges, high interest rates, and poor power supply, fear that the rise in diesel prices could further compound their challenges since diesel is used to power their factories.
As a result, the increased cost of diesel could lead to higher production costs and, ultimately, more expensive goods for consumers.
The situation comes at a time when Nigeria is already facing rising inflation, which reached 26.7% in October.
Many families and households are struggling with the increasing cost of living, and the spike in diesel prices only adds to the economic challenges faced by the population.
Transportation companies are also feeling the impact of higher diesel prices, as a trailer can now consume diesel worth N1.5 million for a round trip from Kano to Lagos and back.
This has led to discussions about increasing transportation fares, which could affect the cost of goods and services nationwide.
It’s important to note that diesel prices are influenced by international market dynamics and the exchange rate of the local currency against foreign currencies, particularly the US dollar.
Nigeria, like many countries, has deregulated diesel prices, allowing them to be determined by market forces. The recent increase in diesel prices is partly attributed to a rise in the price of the US dollar in the foreign exchange market.
As a result, stakeholders in various sectors are calling for government intervention to address the rising costs of essential commodities like diesel, as this trend could have significant consequences for the economy and living standards in the country.
Source: Daily Trust
