Diesel spikes to N290 per litre amid rally in global crude oil prices

The price of automotive gas oil, better known as diesel, spiked to N290 per litre this week.

The surge is on the back of rise in the price of crude oil which sold at $75.55 per barrel at the international market at 11:11 PM (GMT) on Friday.

There has been a rally in the price of crude oil as major economies reopen economic activities.

However, the prolonged high crude prices will ultimately feed into a climb in fuel landing cost for users in Nigeria — meaning an increase in price of diesel which is not subsided like petrol.

The organised private sector (OPS) raised the alarm that the new diesel price may trigger an increase in prices of goods and services, as most businesses in Nigeria rely on diesel-powered generators as an alternative to the unreliable supply of electricity.

The OPS that expressed worry over the new price include the Nigeria Employers’ Consultative Association (NECA); Nigeria Economic Summit Group (NESG); Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA); and National Association of Small and Medium Enterprises (NASMEs).

The National Bureau of Statistics, in its latest diesel price watch report, said the average price paid by consumers for the product increased by 0.69 per cent month-on-month and by 8.99 per cent year-on-year to N238.82 in May from N237.19 in April.

Timothy Olawale, NECA director-general, said the impact of the rise in diesel price will mostly affect manufacturers and other sectors such as banking, telecommunication, and transportation.

He further explained that the “provision of energy at a reliable and affordable price to industries will reduce the demand for diesel, while improving the infrastructural provision of rail for easy movement of goods and persons at a cheaper price will reduce the burden on businesses and further reduce the inflationary rate”.

Last week, the pump price for diesel was sold for N280 per litre.