The price of Automotive Gas Oil, also known as diesel , has risen to a high of N 250 per litre, with businesses taking a beating on the back of rising energy costs .

Many businesses in the country rely heavily on diesel -powered generators for electricity as power supply from the national grid remains poor .
Our correspondent observed on Monday that some filling stations in Lagos had increased the pump price of diesel to N250 , while many others sold it at around N 230 -N 245 .

The average price paid by consumers for diesel increased by 1. 76 per cent month- on -month and 14 .52 per cent year -on - year to N211 .64 per litre in September from to N 207 .98 in August , according to the National Bureau of Statistics .

It said states with the highest average price were Borno ( N245 . 83 ) , Taraba ( N235 ) and Sokoto ( N228 . 33 ) , while those with the lowest average price were Edo ( N 197 .28 ) , Katsina ( N195 .63 ) and Rivers ( N190 ) .

The Chief Executive Officer/ Executive Secretary , Major Oil Marketers Association of Nigeria , Mr Clement Isong , in an interview with our correspondent , attributed the diesel price hike to the increase in global crude oil prices and inadequate access to foreign exchange at competitive rates by private marketers .

Unlike Premium Motor Spirit ( petrol ) , diesel has been deregulated and its pump price is adjusted to reflect the reality in the global crude oil markets . International oil benchmark , Brent crude , recently rose to a high of $ 86 per barrel.

“The challenge in Nigeria is that MOMAN members struggle to access forex at competitive rates . If you are going to access forex at N 360 -N 361 / $1 , then your imports will be uncompetitive ; when the NNPC , or whoever else is importing , has access to forex at $ 305 . So , if they try to import , the landing cost of the product will be uncompetitive . They are not importing now because if they do so , they will lose money,” Isong explained .

The Director General, Lagos Chamber of Commerce and Industry , Mr Muda Yusuf , described the impact of the diesel price hike on businesses as “very severe .”
“Our members have been raising concerns about this . Any time there is increase in crude oil price , the flip side for us in the private sector is increase in energy cost . It is a major issue ; some businesses consume a lot of energy like those in the manufacturing sector ; even hotels and hospitals , they run almost permanently on generators . So , the impact of the diesel price hike will be very high ,” Yusuf told our correspondent .

He added , “The high oil price also heavily penalises businesses because their energy costs go up significantly and that affects the cost of production ; it affects their prices , sales , turnover and profits . It has a chain effect on their operation . So , it is something to worry about .
“ If we our refineries are working well, we would not be subjected to this kind of skyrocketing cost of diesel . ”

The LCCI DG said the availability of regular power supply would have helped to reduce the dependence on diesel -powered generators by businesses, adding that the power sector reform had not proved to be successful .

The Vice-President , Industries , Association of Small Business Owners of Nigeria , Mr Kayode Okanrende , said , “Unfortunately this ( diesel price hike ) is happening at a time when we still believe there is a recession ; when we believe that the populace hasn ’t got purchasing power to even buy . So , we are constrained to increase prices and yet our costs are increasing .

“In effect , we are torn between the devil and the deep blue sea. What do you do ? Lay off staff or negotiate reduction of salaries when people are even crying that the salaries are not even enough to meet their basic needs . We would have been happy if we don ’t have to buy diesel ; if energy supply had increased .

“Unfortunately , power supply is not increasing ; it is virtually even decreasing . So , in effect , what we are doing is that we are killing the so -called real sector . The cost of diesel now is coming to nail the coffin of an ailing industry . ”

Okanrende noted that the government should work to ensure the production of diesel in the country , adding, “For as long as we are relying on importation , many vagaries will affect it, which the government has no control over . It is a sad thing that even though we have the crude here , we are still having to rely on other countries to supply diesel to us .”
https://punchng.com/businesses-groan-as-diesel-hits-n250-per-litre/

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