Ten most expensive states to buy Diesel in Nigeria as of August 2023

This article highlights a significant surge in diesel prices across Nigeria, as reported by the National Bureau of Statistics.

The NBS data reports average diesel prices surged to N854.32/Litre in August up 7.53% month on month and 8.57% same period last year.

In fact, September figures indicate diesel prices crossed the N1000 mark in September as oil prices surged.

We however focus on the top ten states with the highest diesel prices in August 2023, comparing them to figures from July 2023 and August 2022. Additionally, we explore the implications of these rankings for businesses operating in Nigeria.

But first, the surge in diesel prices can be attributed to several key factors.

Firstly, Nigeria’s close ties to global crude oil price fluctuations have led to increased input costs for diesel production, as global oil prices have been volatile. Secondly, the fast depreciation of the Nigerian Naira against foreign currencies has raised the cost of importing diesel and essential raw materials for production, resulting in higher fuel prices.

Also, the removal of fuel subsidies by the Nigerian government has fully deregulated the downstream petroleum sector, allowing market forces to determine fuel prices.

This policy change has led to more frequent and significant price adjustments, including increased costs for transporting goods and materials.

To address the concerns arising from these rising diesel prices, the Federal Government of Nigeria has suspended the Value Added Tax (VAT) on diesel. This move aims to provide immediate relief to consumers and businesses by reducing the overall cost of diesel.

Ranking in Ascending Order

1. Akwa Ibom – Diesel Costs on the Rise

August 2023 Average: 888.89
July 2023 Average: 812.50
August 2022 Average: 731.82
Akwa Ibom has witnessed a noticeable increase in diesel prices.

2. Zamfara – Navigating Fluctuating Diesel Rates

August 2023 Average: 890.00
July 2023 Average: 810.00
August 2022 Average: 768.33
Zamfara grapples with moderate price fluctuations in the diesel market.

3. Yobe – Incremental Rise in Diesel Costs

August 2023 Average: 890.33
July 2023 Average: 832.73
August 2022 Average: 705.00
Yobe experiences a gradual increase in diesel prices.

4. Benue – Dealing with Rising Diesel Expenses

August 2023 Average: 900.55
July 2023 Average: 852.00
August 2022 Average: 780.00
Benue grapples with a significant YoY increase in diesel prices.

5. Kogi – A Continuous Upward Trend

August 2023 Average: 904.29
July 2023 Average: 856.00
August 2022 Average: 804.55
Kogi ranks fifth, showcasing a steady climb in diesel prices.

6. Enugu – Balancing Diesel Price Fluctuations

August 2023 Average: 910.21
July 2023 Average: 872.73
August 2022 Average: 780.34
Enugu navigates moderate price fluctuations in the diesel market.

7. Taraba – Facing a Notable Increase in Diesel Costs

August 2023 Average: 941.67
July 2023 Average: 860.00
August 2022 Average: 766.67
Taraba observes a significant rise in diesel prices over the past year.

8. Abuja – Experiencing a Diesel Price Surge

August 2023 Average: 950.22
July 2023 Average: 872.50
August 2022 Average: 845.00
Abuja takes the eighth spot with a substantial increase in diesel prices.

9. Niger – Leading the Surge in Diesel Costs

August 2023 Average: 960.14
July 2023 Average: 892.50
August 2022 Average: 821.67
Niger experiences the most significant YoY increase in diesel prices, taking the ninth spot.

10. Abia – The State with the Highest Diesel Prices

August 2023 Average: 970.00
July 2023 Average: 890.63
August 2022 Average: 785.33
Abia takes the top position with the highest diesel prices in Nigeria.

Why these matters

Diesel prices are a vital economic indicator, with far-reaching implications for businesses in Nigeria.

Operating Costs: For businesses reliant on diesel generators, such as manufacturing industries and data centers, higher diesel prices directly impact operational expenses. This can lead to reduced profit margins or the need to pass on the increased costs to consumers.

Transportation and Logistics: The transportation sector, including trucking and logistics companies, heavily depends on diesel. Expensive diesel can result in higher shipping costs, affecting the prices of goods and services across the supply chain.

Agriculture: Diesel powers farm machinery and generators for irrigation and storage. Elevated diesel prices can drive up production costs for farmers, potentially leading to food price inflation.

Economic Planning: For government and financial institutions, monitoring diesel price variations provides essential data for economic planning and policy formulation. It can signal inflationary pressures and impact interest rate decisions. The inflation rate is likely to keep rising till the end of the year

Investment Decisions: Businesses, especially those considering expansion or new ventures, consider diesel price trends when making investment decisions. High and volatile diesel prices may deter investments in diesel-intensive sectors.