On Monday, oil marketers highlighted that Nigeria’s foreign exchange woes, combined with the recent 7.5% VAT on diesel, have driven the cost of diesel to N900-N950/litre across numerous states. This price surge alarms local manufacturers, who predict potential factory shutdowns and job losses.
The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) shed light on this issue in an Abuja press briefing. They pointed to their struggle to procure US dollars, hindering their diesel import capabilities.
NOGASA’s National President, Benneth Korie, informed the press that prior to the government’s introduction of the 7.5% VAT on diesel, its price hovered around N650/litre. This change, which began on June 20, 2023, was confirmed by officials from the Nigeria Customs Service and Federal Inland Revenue Service.
Korie emphasized, “The diesel price hike, ranging between N900 to N950/litre, isn’t just due to the VAT but also the dollar shortage. The government, bank CEOs, and Central Bank of Nigeria need to tackle this dollar dilemma. If unchecked, it could wreak havoc.”
Korie urged President Bola Tinubu to operationalize Nigeria’s refineries, which would alleviate dollar pressure by reducing the need for imports. He remarked, “Nigerian engineers can rejuvenate our refineries. Relying on imports isn’t sustainable. Once our refineries function, the dollar demand will lessen.”
Korie also highlighted the deplorable state of Nigerian roads, citing the Port Harcourt-Warri road, where approximately 500 tankers are currently stranded.
Manufacturers, including the Nigerian Textile Manufacturers Association, echoed these concerns. Hamma Kwajaffa, their Director-General, stated that many textile producers consider halting operations due to soaring energy expenses.
Furthermore, Coleman Technical Industries Limited’s CEO, George Onafowokan, stated that escalating diesel prices invariably lead to increased production costs. He emphasized, “Rising diesel prices burden everyone. It heightens logistics and power costs. We urge the government to address this persistently climbing diesel cost.”