Commencing today, Saturday, August 12, the cost of diesel will escalate to ₦867 per liter in Lagos state and ₦875 in the South-West region, as disclosed by sources within the industry.
The Surge in Prices
Despite the earlier deregulation of diesel prices and the removal of fuel subsidies, diesel costs are soaring due to the mounting ex-depot rates. This week, insiders revealed that ex-depot prices for diesel at the Apapa port have surged, ranging from ₦790 to ₦820 per liter.
Recent Evolution of Ex-Depot Rates
Simultaneously, according to a data sheet shared by the Major Oil Marketers Association of Nigeria (MOMAN), the ex-depot prices for diesel at the Apapa port exhibited the following trend:
July 24 – ₦624 per liter
July 25 – ₦638 per liter
July 27 – ₦647 per liter
July 28 – ₦653 per liter
July 31 – ₦693 per liter
August 2 – ₦649 per liter
August 3 – ₦714 per liter
In the same data sheet, MOMAN also reported diesel prices across the country during the same period, pegging it at ₦650 per liter. This calculation was based on the exchange rate of 1 US dollar to ₦895 at that time.
Exchange Rate Volatility Impact
Nigeria’s exchange rate has been undergoing notable fluctuations. Recent reports indicate that the naira-dollar exchange rate reached as high as ₦955/$1 on the black market, marking a turbulent week. The week began with the exchange rate at ₦895/$1 but dropped to ₦900/$1 on August 9, representing a historic low.
This exchange rate turmoil has caused an 8% depreciation in the local currency against the dollar month-to-date due to surging demand outstripping supply.
Implications on Diesel Prices
Given that diesel, along with other petroleum products, is imported into Nigeria and purchased in dollars, the depreciating naira will inevitably exert a negative influence on diesel prices. This phenomenon is already manifesting at the Apapa Hub.
Nationwide Diesel Price Upsurge
Furthermore, it’s worth noting that diesel prices have risen across other parts of the country since the second quarter of 2023. The National Bureau of Statistics (NBS) June 2023 diesel price watch report disclosed that diesel costs ₦899.23 per liter in Taraba state, ₦875.67 per liter in Adamawa state, and ₦873.33 per liter in Niger state.
The national average diesel price for June 2023 stood at ₦815.83 per liter, marking a 3.37% reduction from the ₦844.28 per liter recorded in May 2023, according to data from the NBS.