The average diesel price in October was N801.09 per litre, marking an increase of 215.30% from N254.07 per litre in September 2021.
This was disclosed by the National Bureau of Statistics (NBS) on Wednesday in a report titled AGO Price Watch Report for October 2022.
Higher diesel prices have been a headache for Nigerian manufacturers and businesses this year as the Russian invasion of Ukraine has caused major commodity price increases. The report said:
- “On a month-on-month basis, this increased by 1.42% from N789.90 per litre reported in September 2022. On state profile analysis, the highest average price of the product in October 2022 was recorded in Ebonyi with N858.33, followed by Bauchi with N857.50, and Plateau with N856.25.
- “On the other hand, the lowest price was recorded in Akwa Ibom with N748.18, followed by Benue with N750.00 and Edo with N765.91.”
Analysis by zone showed that the North-Central had the highest price at N818.41, while the South-South recorded the lowest price at N774.96.
For the record: Since diesel was deregulated in Nigeria, importers no longer have access to subsidised exchange rates for diesel imports. As such, they have to source for dollars at the black market, which is at N800/$. This combination of headwinds puts businesses in mortal danger. Analysts at Nairametrics earlier noted that it will not be surprising if diesel ends up being sold at N1000/litre soon.
Options for heavy diesel users are to store a lot, buy financial hedges on the market or just switch to natural gas products like CNG, LNG, or LPG. The return on investment (ROI) on switching has improved significantly, especially since natural gas prices in Nigeria are indexed to the heavily regulated CBN exchange rate.