Surge in Fuel Prices Aggravates Production Costs: Diesel Up 25.45%, Petrol Spikes 222.92% in 12 Months
Over the last 12 months, the cost of automotive gas oil (diesel) in Nigeria has surged by 25.45%, while premium motor spirit (PMS) prices, influenced by subsidy removal, experienced a significant spike of 222.92%. These fuel price increases have contributed to heightened production costs and played a substantial role in the overall inflation rate.
Key Points:
- Diesel Price Surge: Automotive gas oil (diesel) prices rose by 25.45% in the past year, increasing from N801.09 per liter in October 2022 to N1004.98 per liter in October 2023. The surge in diesel prices has adversely affected the cost of production across various sectors.
- PMS Price Spike: Premium motor spirit (PMS or petrol) prices surged by 222.92% over the same period. In October 2023, petrol prices reached N630.63 per liter, compared to N195.29 in October 2022. Subsidy removal played a significant role in driving up petrol prices.
- Month-on-Month Increases: On a month-on-month basis, PMS prices increased by 0.71%, rising from N626.21 in September 2023. Diesel recorded a higher month-on-month increase of 12.82%, reaching an average of N1004.98 in October 2023.
- State-wise Variations: Zamfara State had the highest average retail price for PMS at N659.38, followed by Gombe and Borno states. Lagos, Oyo, and Delta states had the lowest average retail prices for PMS. For diesel, the three states with the highest average prices were Plateau, Nasarawa, and Benue, while Rivers, Borno, and Kebbi had the lowest diesel prices.
- Impact on Production Costs: The substantial increases in diesel and petrol prices have exacerbated production costs for businesses across various sectors. The rise in fuel costs contributes to the overall inflation rate, affecting both businesses and consumers.
Summary: The surge in fuel prices, particularly the 25.45% increase in diesel and the significant spike of 222.92% in petrol prices over the last 12 months, poses challenges for businesses in Nigeria. The impact on production costs and the broader inflationary effects underscore the need for strategic measures to address fuel pricing dynamics and their economic ramifications.
