Oil marketers have revealed that a combination of the foreign exchange crisis in Nigeria and the recent enforcement of a 7.5% Value Added Tax (VAT) on Automotive Gas Oil (diesel) has resulted in a significant rise in the cost of diesel, reaching between N900 and N950 per liter in many states.
This increase has prompted concerns from local manufacturers, who fear that it could lead to the closure of factories and loss of jobs.
Representatives from the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) explained during a press briefing in Abuja that their inability to access United States dollars has hindered their ability to import diesel.
Prior to the introduction of the 7.5% VAT, the cost of diesel was around N650 per liter.
The President of NOGASA, Benneth Korie, emphasized that the surge in diesel prices is also linked to a scarcity of dollars.
He urged government intervention and stressed the need for a collaborative effort among financial institutions and authorities to address the dollar shortage issue.
Furthermore, Korie called on President Bola Tinubu to focus on revitalizing Nigeria’s refineries, as this could alleviate the pressure on foreign currency and reduce the reliance on imported petroleum products.
The dire state of Nigerian roads was another issue raised by Korie.
He cited an example of the Port Harcourt-Warri road, where approximately 500 tankers were stranded due to the poor condition of the road.
Korie warned that if road infrastructure is not improved, the supply of petroleum products to various locations in the country could be disrupted.
In response to the situation, Hamma Kwajaffa, the Director-General of the Nigerian Textile Manufacturers Association, expressed concern that rising energy costs, driven by increased diesel prices, may force textile manufacturers to consider shutting down operations.
George Onafowokan, CEO of Coleman Technical Industries Limited, emphasized that the escalating diesel costs would lead to higher production expenses for his company and other businesses.
He urged the government to find sustainable solutions to address the ongoing rise in diesel prices, which is affecting various sectors of the economy.
