The average diesel price for the month of October was N801.09 per liter, an increase of 215.30% from N254.07 per liter in September 2021.
This was revealed by the Office for National Statistics on Wednesday evening, in a report titled “AGO Price Surveillance Report for October 2022.”
Higher diesel prices have been a headache for Nigerian manufacturers and companies this year, as the Russian invasion of Ukraine has seen prices rise significantly. The report said:
- “Month-on-month, this was up 1.42% from N789.90 per liter reported in September 2022. In the state profile analysis, the highest average price for the commodity in October 2022 was recorded in Ebonyi at 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.”
They added that the analysis by zone showed that the North-Central had the highest price at N818.41, while the South-South registered the lowest price at N774.96.
For the record: Nairametrics analysts say that since diesel is deregulated in Nigeria, there are no subsidized exchange rates for diesel imports, so traders/importers have to look for dollars on the black market, which is at N800/$. This combination of headwinds puts companies in mortal danger. It would not be a surprise if diesel sells for N1000/litre in the next few weeks.
Options for heavy diesel users are to store a lot, buy financial hedges in the market, or simply switch to natural gas products such as CNG, LNG, or LPG. The return on investment (ROI) on the exchange has improved significantly, especially as natural gas prices in Nigeria are indexed to the heavily regulated CBN exchange rate.