7.5% VAT pushes diesel prices to between N900 and N950 per liter

The 7.5% value-added tax (VAT) on diesel has pushed pump prices to N900 at the least and N950 at the maximum across Nigeria.

This is according to Bennett Korie, the President of the Natural Oil and Gas Suppliers Association of Nigeria.

He said this during an August 14 press briefing in the Federal Capital Territory (FCT), while addressing the economic situation in the country which has deteriorated due to marketers’ inability to import diesel as they presently cannot access dollars.

Note that the exchange rate between the naira and dollar closed last week quoting for as high as N955/$1 on the black market.

Korie stated that the foreign exchange crisis, as well as the 7.5% VAT on diesel, have pushed prices from N650 per litre to over N900 per litre. He said:

“Diesel price is now approaching N900 to N950/litre depending on where you are buying it from. Before the introduction of VAT on diesel by the FIRS, diesel was around N650/litre.

“This increase in price is also due to the scarcity of dollars. The government has to intervene in this dollar situation. All bank CEOs, the Central Bank of Nigeria and others must meet to address this dollar issue. The way it is going, it will destroy a lot of things for us if it is not controlled.

“Our refineries were built by human beings and can be fixed by human beings. I believe Nigerian engineers can fix these refineries, instead of us depending on imports. This is not sustainable.

“We are piling pressure on the very limited dollars in the country by importing petroleum products and other commodities. But once our refineries start working, this pressure will drastically reduce. The government must fix our refineries.”
Korie also addressed the issue of road infrastructure on the Port-Harcourt-Warri Road, which further compounds the problems at hand.

He said: “For two weeks now, our tankers have been on that road; you can’t cross it. Our roads are bad, our trucks are trapped on the Warri-Abuja Road for two weeks, and our drivers are kidnapped, and killed, while others suffer.
“Some of the roads are blocked. If the government does not fix those roads, then petroleum products will stop coming to Abuja and other locations across the country.”

Over the weekend, Nairametrics reported a breaking news story that by August 12 and beyond, diesel prices would hit N867 per litre in Lagos state and N875 in the Southwest region due to increasing in ex-depot prices, particularly in the Apapa Hub which was selling between N790-N820 per litre.

Meanwhile, earlier this month, the Nigerian Employers’ Consultative Association (NECA) Director-General, Mr. Adewale-Smatt Oyerinde said that the 7.5% Valued Added Tax for Diesel imports should be reconsidered. He said:

“Our businesses continue to be weighed down by these additional tax burdens; it is high time we reviewed such practices that deter economic growth and create hurdles in the path of doing business.”