The average retail price for diesel rose to N1004.98 per litre for October 2023 from the N890.80 recorded sold in September 2023. This represents a 12.82% increase on a month-on-month basis.
On a year-on-year basis, the average price of diesel increased by 25.45% from N 801.09 to its current figure.
State-by-state comparison of prices
Examining the disparities in state prices, the three states with the highest average prices for the product in October 2023 were all situated in the North Central zone of the country.
These include Plateau State (N1150.00), Nasarawa State (N1138.00), and Benue State (N1091.67).
Conversely, the three states with the lowest prices were Rivers State (N824.44), Borno State (N827.27), and Kebbi State (N845.00).
The breakdown of the average price of Automotive Gas Oil (Diesel) by zone reveals that the North Central Zone registered the highest price at N1090.69, whereas the North-East Zone reported the lowest price at N947.32, based on the zonal analysis.
Effects of rising diesel prices on the economy
Nigeria’s economy is major powered by alternative energy sourced from private individuals and businesses rather than the national grid.
Manufacturers have complained that sourcing alternative energy contributes around 30% to 40% of the cost of production.
In 2022, the Director-General of the Manufacturers Association, Mr. Segun Ajayi-Kadir said that manufacturers spent around N144 billion sourcing energy in 2022.
Rising diesel prices lead to an increase in the cost of production which inevitably results in inflation thereby leading to reduced consumer purchasing power.
Why diesel price is rising
The reasons for the increase in diesel prices in recent times are multifaceted. First, the reintroduction of the 7.5% VAT on diesel in June coupled with the continued weakness of the naira in the market.
In June, the federal government disclosed plans to reintroduce the suspended 7.5% VAT on diesel which drew the irk of Nigerians, especially manufacturers.
Also, the CBN’s reforms on the exchange market which led to a “controlled devaluation” of the naira has seen the loss of almost 40% of its value since June. This has resulted in diesel prices increasing from N815 per litre in June to their current value.
