Commencing today, Saturday, August 12, diesel prices are set to surge to N867 per litre in Lagos state and N875 per litre in the Southwest region, based on information sourced from industry insiders by Nairametrics.
Reasons Behind the Price Increase
Diesel prices are witnessing a rapid escalation despite having been deregulated prior to the removal of fuel subsidies. The upsurge is attributed to the escalating ex-depot prices. Insider reports revealed that ex-depot prices for diesel at the Apapa port now fluctuate between N790 and N820 per litre.
Recent Ex-Depot Price Trends
In a recent industry data document shared by the Major Oil Marketers Association of Nigeria (MOMAN), the following ex-depot prices for diesel at the Apapa port were recorded:
Moreover, as per the same MOMAN industry document, the diesel price within the nation during the corresponding period was marked at N650 per litre. The calculation was based on an exchange rate of 1 US dollar to N895 at that time.
Volatility in Exchange Rate
Nigeria’s exchange rate is undergoing a period of substantial volatility. Recent reports have indicated that the naira-dollar exchange rate closed the week on a turbulent note, reaching as high as N955/$1 on the black market. Earlier in the week, the exchange rate stood at N900/$1 on August 9, marking the lowest recorded point in history. Notably, the exchange rate has depreciated by 8% month-to-date due to persistent demand surpassing supply.
Impact of Exchange Rate on Diesel Prices
Given that diesel, along with other petroleum products, is imported into Nigeria and purchased in US dollars, the weakening of the local currency against the dollar is exerting a negative influence on diesel prices. This trend is manifesting at the Apapa Hub.
Expansion of Diesel Price Surge
It is crucial to highlight that diesel prices have also experienced an upturn in various parts of the country since the second quarter of 2023. The National Bureau of Statistics’ (NBS) June 2023 diesel price watch report disclosed that in June 2023, diesel cost N899.23 per litre in Taraba state, N875.67 per litre in Adamawa state, and N873.33 per litre in Niger state.
Concurrently, the country’s average diesel price was positioned at N815.83 per litre, showcasing a 3.37% reduction from the N844.28 per litre recorded in May 2023, as per NBS data.
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