Marketers Warn of Imminent Fuel Scarcity as Diesel Price Skyrockets to N1,100 Per Liter

• Marketers of diesel products have warned of an imminent resurgence of fuel scarcity
• This is as a result of the price of diesel skyrocketing to over N1,000 in some locations
• The marketers have called on FG to intervene to help reduce the price of the product

Petroleum marketers in Nigeria have appealed to the federal government for intervention to address the rapid surge in diesel pump prices in order to avert an impending distribution crisis.

They have expressed their inability to continue nationwide petroleum product distribution, including petrol, due to the exorbitant cost of diesel, which fuels their trucks and is currently retailing for N1,100 per liter in numerous areas.

This plea for assistance was made by members of the Natural Oil and Gas Suppliers' Association of Nigeria (NOGASA) in a statement issued on Tuesday, September 19, 2023.

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The development follows the federal government's confirmation of the implementation of a 7.5% Value Added Tax on diesel which has left Nigerians groaning.

Diesel price hike causing hardships in haulage transportation

Mr. Benneth Korie, the president of the association, expressed concern over the consistent rise in diesel prices over the past few months, according to Leadership.

He highlighted that this situation has been exacerbated by the challenges marketers face in obtaining affordable bank loans to replenish their stocks and maintain the current petrol pump price of N617 per liter.

Korie voiced his distress over the steep increase in diesel costs, which is noticeably impacting both the transportation of goods and the daily commute, leading to hardships for the public.

Consequently, he appealed to the government to take prompt action to prevent the sector from facing a standstill and disrupting the expected progress.

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The president of NOGASA assured that addressing the persistent increase in diesel prices will be a significant agenda item at the union's upcoming annual general meeting (AGM) scheduled for October.

NOGASA is worried about the ugly development and trying to understand why prices of diesel are going as high as N950 to N1,100 per litre in the market with a view to moderating the prices and shocks in the economy.

Perceived reasons for hike in diesel price

Experts, on the other hand, opined that the surge in diesel prices may be linked to the increase in global crude oil prices, presently at $95 per barrel.

Another contributing factor is the depreciation of the Naira, which is approaching the rate of N1,000/$1 in the parallel exchange rate market.

Korie in an earlier report by Legit.ng had raised an alarm when the federal government's implementation of the 7.5% VAT had forced the price of the commodity to shift to N950 per litre.

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He suggested that it is imperative for the government to urgently prioritize the rehabilitation of Nigerian refineries to prevent the escalating energy costs from adversely affecting the economy.

He emphasized that the association will remain committed to fulfilling its responsibilities as it advances in the oil and gas industry.

He encouraged suppliers to continue with their respective business activities until a formal resolution is reached at the upcoming NEC meeting.

FG May Suspend VAT on Diesel as Tinubu Unveils 38-Man Committee For Tax Reform

In related news, Legit.ng reported that President Bola Tinubu introduced a fiscal policy and tax reform committee, which consists of a blend of private and public experts.

Leading the committee is Taiwo Oyedele, a seasoned professional in tax and policy matters, and they are tasked with the responsibility of implementing tax reforms within a concise 30-day timeline.

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Oyedele emphasized that the committee's composition was meticulously designed to ensure a comprehensive pool of knowledge, extensive expertise, and broad representation from key stakeholder groups across all geopolitical regions.

He also proposed the suspension of Value Added Tax (VAT) on diesel as a measure to alleviate the economic repercussions of the subsidy removal.

Source: Legit.ng