I asked a similar question in another thread on Nairaland. https://www.nairaland.com/2101095/why-hasnt-price-diesel-fallen

EmoBoy:


The prices of diesel are in the control of the private sector. Government stopped subsidizing the prices of diesel years ago.

Nawa oooo... AM very sure. If the Price was reduced, U would b d first to say it. Nasty quote "GEJ till """

HNosegbe:
I asked a similar question in another thread on Nairaland. https://www.nairaland.com/2101095/why-hasnt-price-diesel-fallen

Bro we can start a Protest

Cc Barcanista demdem egift ceo4live berem laykorn NgeneUkwenu Caseless Omenka CaptainAmerica1 Rawani Donphilopus TundeAjani Alphaoscar jomoh egift caseless cleverly arewafederation OrlandoOwoh keneking Obiagelli Berem Jarus thankyoujesus HNosegbe

HNosegbe:


This is an even bigger reason for prices to fall, because prices in a deregulated market are supposed to be subject to market forces which are a mix of supply, demand and cost of production. So if we import diesel from a global market and prices are falling in other countries, it is common sense to expect a similar fall in Nigeria.

OP is right.

But if the government is not in control of the prices of diesel, should they be blamed for the supposed high cost?

EmoBoy:
You can see clearly from the graph as it was stated that average prices for diesel are 1 dollar. Last I checked 1 dollar converts to 167 naira.
I hope you know where I'm driving at?

I know what you're driving at.

But here's the fact, your comparison is wrong. Nigeria is among the top oil producing countries in the world. So, compare the prices with other oil producing countries and you'll see the kind of mess Nigeria is.

CaptainAmerica1:


I know what you're driving at.

But here's the fact, your comparison is wrong. Nigeria is among the top oil producing countries in the world. So, compare the prices with other oil producing countries and you'll see the kind of mess Nigeria is.

America is an oil producing country.

EmoBoy:


America is an oil producing country.

When did they start oil production?

And remember I said Nigeria is among the top oil producing countries in the world. Hence, the need to compare with the top oil countries.

CaptainAmerica1:


When did they start oil production?

And remember I said Nigeria is among the top oil producing countries in the world. Hence, the need to compare with the top oil countries.

I don't whats the problem here. NNPC sells diesel at 137 naira per liter which is about 60 - 70 cents. Almost the same price with what obtains in most parts of the world.

Independent oil marketers may have carted away an estimated N132 billion in the past eight months by maintaining supposedly deregulated diesel prices at an average N145 per litre, despite a 55 percent drop in global crude prices.

BusinessDay gathered that Nigeria’s total diesel consumption of about 12 million litres per day, is still sold at varying prices across the country, ranging from N140 up north to N150 down south and it appears that the Petroleum Product Pricing Regulatory Agency (PPPRA) is either unwilling or incapable of calling the diesel cartel to order.

Last week, the Federal Government reduced the pump price of petrol by 10 percent, to N87 per litre and many in the public space commended the government for transmitting perhaps the only benefit of the falling oil prices to Nigerians.

However, independent oil marketers have yet to align their prices with the massive drop in global crude oil prices.

According to the latest AGO pricing template released by the Petroleum Product Pricing Regulatory Authority (PPPRA) on Friday 23 January, the estimated open market price (EOMP) of diesel is N99.75 while the landing cost is N90.41.



Yet actual pump prices across several filling stations visited by BusinessDay as at Sunday 25 January, averaged N145 per litre, which is equivalent to a 45 percent margin above the open market price recommended by PPPRA.

This reality raises the question of why diesel prices are yet to fully reflect the price adjustment.

Investigations by BusinessDay revealed that independent oil marketers appear to be having an internal price war and no one wants to be caught dancing when the music stops.

One industry source admits that the diesel stock bought when oil prices were relatively high, have been sold off, leaving marketers with no excuse for selling diesel at a price that does not reflect the cheaper stock now being either directly imported, or bought off other suppliers.

Nonetheless, marketers are careful not to adjust prices downward too sharply, especially when competitors have not reduced prices in similar proportion.

The control of the market by a few, has therefore created a support level for the price of diesel, bestowing on the marketers a huge premium above actual landing costs.

More so, BusinessDay gathered that supplies originating from the Nigerian National Petroleum Corporation (NNPC) are sold at N137 per litre, which creates a natural benchmark for the marketers to build sales margins on.

“Although the NNPC accounts for at least 25 percent of industry supply, we let market forces determine the diesel price. We cannot fix it,” says Ohi Alegbe, NNPC spokesman, in defence of alleged price fixing by the oil corporation.

“It appears the diesel prices are not fully driven by market forces … there may be still be some form of government regulation or extraneous costs beyond the pricing template.” says Biodun Adedipe, economist and chief consultant at BAA Consult, a leading economic research firm.

The recent devaluation of the naira has also been cited as a major factor for maintaining diesel prices at N145, on the premise that 75% of supply is imported and devaluation has led to higher importation costs for the product.

Evidently, this is not the case as shown by the PPPRA template.

The adverse effect of the diesel prices being sticky downwards is a sustained high cost of energy generation for the Nigerian economy, where most manufacturers and middle- to-high income households rely on diesel-powered generators for alternative power supply.

A recent report released by the National Bureau of Statistics (NBS) shows that generator fuel is the greatest of all intermediate inputs in the manufacturing sector, with the cost overhead growing by a compound annual growth rate of 17%, which could rise to about N2 trillion in 2015, by our estimates.

Industry watchers are of the view that the silence of the NNPC and the PPPRA as regulators could be interpreted as being complicit in such a pricing conspiracy.

Nonetheless, it remains to be seen if oil marketers will deflate their appetite for excessive margins and adjust diesel prices to fully reflect the present reality of a sub-$50 international oil price.

EmoBoy:


I don't whats the problem here. NNPC sells diesel at 137 naira per liter which is about 60 - 70 cents. Almost the same price with what obtains in most parts of the world.

My point is simple. Nigeria is ranked 13th in the world in order of oil production. Yet our diesel price is 58th on the global petrol price scale. It doesn't correlate.

CaptainAmerica1:


My point is simple. Nigeria is ranked 13th in the world in order of oil production. Yet our diesel price is 58th on the global petrol price scale. It doesn't correlate.

Whats the price of diesel in Nigeria?

EmoBoy:


Whats the price of diesel in Nigeria?

$0.86 http://www.globalpetrolprices.com/diesel_prices/

Still 145 nawa ooo

This thread should go viral

This further confirms the fact that even when petrol is deregulated, the price will forever remain high like in the case of diesel. Imagine a government that can't eliminate mago-mago in the system and also can't let international market forces determine price now wants to totally expose its citizens to the sharks. I tire for PDP governments. This is truly a case of voodoo economics.

iluvnaija:
If you want change, vote out this govt in few weeks time.

I agree with you. I have asked myself the same question. The price of diesel remains the same. The govt managed to drop the petrol price a little now there is scarcity everywhere. We need to vote out GEJ if we want any hope for the country

Still 147 in my Area tho