Dangote, BUA, Other Manufacturers Mull Hike in Prices Amid Fear Diesel May Hit N1500/Litre

Dangote, BUA, Other Manufacturers Mull Hike in Prices Amid Fear Diesel May Hit N1500/Litre

  • The price of crude oil has risen to about $97 per barrel, triggering fears of a possible diesel price increase to N1,500 per litre
  • The development could lead manufacturers to hike the prices of goods as the cost of production rises
  • There are speculations that the Nigerian government might incur more subsidy costs due to an increase in crude oil prices

The manufacturing sector may soon issue price adjustments for their products over fears that the diesel price may shoot up to N1500 per litre.

The development comes as speculations mount that the Nigerian government may incur more petrol subsidies in the next few weeks.

The price of crude oil recently hit $97 per barrel on Wednesday, September 27, 2023 -- the highest in eight months.

Diesel price, subsidy, crude oil
Nigerians apprehensive as manufacturers mull increase Credit: Anadolu Agency
Source: AFP

Manufacturers fear incurring further costs over diesel price

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Manufacturers and businesses will also see a rise in their cost of production as the development may push the price of diesel and aviation fuel to almost $15,000 per litre.

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The Guardian reports that oil prices continued to rise and saw an uptick of about four per cent as Brent traded for about &97 barrels.

Analysts believe crude oil may cruise past $100 per barrel before December as major oil producers maintain cuts.

The windfall is a mixed fortune for Nigeria due to its inability to produce more crude as it continues its total dependence on imports for petroleum products.

There are speculations that the Nigerian government reverted to paying subsidies on petrol after initially scrapping the scheme that has gulped trillions of naira from the national treasury.

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Nigeria reintroduces subsidy

President Bola Tinubu announced during his inaugural address that Nigeria would no longer pay subsidies on petrol as there was no provision for it in the 2023 budget.

The country consumes about 19.5 billion litre of petrol yearly, with 99% of the consumption being petrol or PMS, while diesel and aviation fuel account for one per cent.

Legit.ng reported that the Nigerian government paid N169.4 billion as a subsidy to maintain the petrol price at N620 per litre.

The report cited a document by the Federal Account Allocation and Committee (FAAC) revealing that the Nigerian National Petroleum Company Limited (NNPC) paid subsidy from the proceeds of dividends from NLNG.

“N1000 per litre?” Marketers speak on fuel price increase, ask Nigerians not to panic

In an earlier report by Legit.ng, the Independent Petroleum Marketers Association of Nigeria (IPMAN) hinted that there would be changes in the pump price of fuel in the country.

Speaking to Legit.ng, the national president of IPMAN, Chinedu Okoronkwo, however, asked Nigerians not to panic.

Source: Legit.ng

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