Dangote, BUA, other manufacturers may hike prices over fears diesel may hit N1500/litre

The Manufacturing sector may soon issue price adjustments for their products over fears that the diesel price may shoot up to N1500 per litre.

The development comes as speculations mount that the Nigerian government will incur more petrol subsidies in the next few weeks as the price of crude oil hit $97 per barrel on Wednesday, September 27, 2023, the highest in eight months.

Manufacturers and businesses will also see a rise in their cost of production as the development may push the price of diesel and aviation fuel to almost $15,000 per litre.

The Guardian reports that oil prices continued to rise and saw an uptick of about four per cent as Brent traded for about &97 barrels.

Analysts believe crude oil may cruise past $100 per barrel before December as major oil producers maintain cuts.

The windfall is a mixed fortune for Nigeria due to its inability to produce more crude as it continues its total dependence on imports for petroleum products.

There are speculations that the Nigerian government reverted to paying subsidies on petrol after initially scrapping the scheme that has gulped trillions of naira from the national treasury.

Nigeria reintroduces subsidy

President Bola Tinubu announced during his inaugural address that Nigeria will no longer pay subsidies on petrol as there was no provision for it in the 2023 budget.

The country consumes about 19.5 billion litre of petrol yearly, with 99% of the consumption being petrol or PMS, while diesel and aviation fuel account for one per cent.

Legit.ng reported that the Nigerian government paid N169.4 billion as a subsidy to maintain the petrol price at N620 per litre.

The report cited a document by the Federal Account Allocation and Committee (FAAC) revealing that the Nigerian National Petroleum Company Limited (NNPC) paid subsidy from the proceeds of dividends from NLNG.