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The price of automotive gas oil, popularly known as diesel, has increased to N290 per lire.
The spike comes on the heels of the rise in the price of crude oil which sold at $75.55 per barrel at the international market at 11:11 PM (GMT) on Friday.
The price of crude oil has been on the rise as major economies reopen economic activities.
But the prolonged appreciation in crude prices will ultimately feed into a climb in fuel landing cost for users in Nigeria — meaning an increase in the price of diesel which is not subsided like petrol.
The development has prompted the Organised Private Sector (OPS) to alarm that the new diesel price may trigger an increase in prices of goods and services. Most businesses in Nigeria rely on diesel-powered generators as an alternative to the unreliable supply of electricity.
Among the OPS that expressed worry over the new price are the Nigeria Employers’ Consultative Association (NECA); Nigeria Economic Summit Group (NESG); Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA); and National Association of Small and Medium Enterprises (NASMEs).
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According to the National Bureau of Statistics, in its latest diesel price watch report, the average price paid by consumers for the product increased by 0.69 per cent month-on-month and by 8.99 per cent year-on-year to N238.82 in May from N237.19 in April.
NECA director-general, Timothy Olawale, said the impact of the rise in diesel price will mostly affect manufacturers and other sectors such as banking, telecommunication, and transportation.
He further explained that the “provision of energy at a reliable and affordable price to industries will reduce the demand for diesel, while improving the infrastructural provision of rail for easy movement of goods and persons at a cheaper price will reduce the burden on businesses and further reduce the inflationary rate”.
Source: TheCable
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.