Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses. The introduction of a 7.5 percent Value Added Tax on Automotive Gas Oil in Nigeria has compounded the effects of the country’s foreign exchange crisis. See how Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
Oil marketers stated on Monday that the combination of the foreign exchange crisis in Nigeria and the recent introduction of a 7.5 percent Value Added Tax on Automotive Gas Oil, commonly known as diesel, has resulted in a rise in the price of the product to approximately N900 to N950 per liter across numerous states. This escalation has prompted local manufacturers to express concerns that it could potentially force the shutdown of certain factories, leading to unemployment.
Contents
- 1 NOGASA Addresses the Media: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
- 1.1 Manufacturers express frustration over the increase:
- 1.2 Related Topics: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
- 1.3 Read Also: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
- 1.4 Summing Up: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
- 1.5 Share this:
- 1.6 Like this:
NOGASA Addresses the Media: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
Addressing the media in Abuja during a press conference organized by the Natural Oil and Gas Suppliers Association of Nigeria, the marketers clarified that their challenge in procuring diesel was due to their inability to obtain United States dollars.
Benneth Korie, the National President of NOGASA, informed reporters that prior to the implementation of a 7.5 percent Value Added Tax by the Federal Government, the price of diesel stood at approximately N650 per liter. This is how Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
The PUNCH newspaper, on June 20, 2023, covered the initiation of the 7.5 percent Value Added Tax (VAT) application on diesel by the Federal Government.
Officials from the Nigeria Customs Service and Federal Inland Revenue Service, situated in Abuja, verified this development, emphasizing that Automotive Gas Oil (AGO) was not excluded from the VAT payment, as indicated in the VAT Modification Order of 2021.
Addressing the media during the press briefing held on Monday, the president of NOGASA remarked, “The cost of diesel is now edging closer to N900 to N950 per liter, contingent on the purchasing location. Prior to the implementation of the VAT on diesel by the FIRS, the price of diesel was approximately N650 per liter.” Understand how Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
“The surge in price is additionally attributed to the scarcity of US dollars. The government needs to take action regarding this dollar shortage. CEOs of all banks, along with the Central Bank of Nigeria and other stakeholders, should convene to tackle this dollar-related concern. If left unchecked, the current trajectory could lead to significant repercussions.”
Korie also urged President Bola Tinubu to take steps toward revitalizing Nigeria’s refineries. He emphasized that the strain on the demand for dollars from marketers and other importers would diminish once Nigeria’s refineries begin producing refined products.
“Our refineries were constructed by human hands and can be restored by human expertise. I firmly believe that Nigerian engineers possess the capability to rehabilitate these refineries, rather than us relying on imports. This approach is not sustainable. Follow how Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
“We are placing excessive demand on the already limited pool of dollars within the country through the importation of petroleum products and other goods. However, once our refineries are operational, this pressure will significantly ease. It is imperative for the government to address the repair and functioning of our refineries,” he expressed.
The president of NOGASA also expressed strong dissatisfaction with the condition of Nigerian highways, providing an example of the Port Harcourt-Warri road, emphasizing that approximately 500 tankers were presently immobilized on that route due to its extremely poor state.
“For the past two weeks, our tankers have been stranded on that route; it’s impassable. Our road infrastructure is in disarray, exemplified by our trucks being stuck on the Warri-Abuja road for a fortnight. Our drivers are exposed to kidnappings and fatalities, while others endure severe hardships. Understand how Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
“Some of these roads are completely blocked. If the government doesn’t undertake the necessary repairs, the transportation of petroleum products to Abuja and other regions across the nation will inevitably be disrupted,” Korie declared.
Manufacturers express frustration over the increase:
In response to this situation, the Director-General of the Nigerian Textile Manufacturers Association, Hamma Kwajaffa, commented that numerous textile manufacturers were deliberating the possibility of ceasing their operations due to escalating expenses, primarily stemming from the surging energy costs.
The DG mentioned that textile manufacturers were unable to bear the prospective price of diesel, which is projected to reach a point where it becomes unaffordable. Follow up on Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
He remarked, “A considerable number of them are considering temporary shutdowns. We are unable to cope with such exorbitant expenses. Presently, there are fewer than 24 functioning textile units and even those in operation are deliberating over closure. They’ve reached a critical point. These enterprises are not charitable endeavors; they must achieve a viable balance.”
Likewise, George Onafowokan, the Chief Executive Officer of Coleman Technical Industries Limited, echoed the sentiment, stating that the elevated diesel costs directly translated to escalated production expenses for the company.
He appealed to the government to seek enduring resolutions for the ongoing surge in diesel prices.
Onafowokan expressed, “Whenever the diesel price surges, it triggers a corresponding rise in costs across the board. This increase affects everyone’s logistics expenses, and if diesel reaches N950, it will inevitably lead to elevated power costs.”
“We are collectively facing a crisis. The majority of businesses in Nigeria, particularly manufacturers, are enduring constant setbacks. Frankly speaking, the government should enhance its efforts, not just by providing relief to the general population, but also by supporting the businesses that provide employment, particularly the manufacturing sector.”
Related Topics: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
To gain a deeper understanding of this topic, explore the following related topics.
- What is the price of 1 Litre of diesel?
- How much is a Litre of diesel in Nigeria today?
- What is the trend in diesel prices in Nigeria?
- Why is the price of diesel high in Nigeria?
- Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
Here is some general information about why diesel prices might be high in Nigeria:
Import Dependency:
Nigeria may rely on imported refined petroleum products, including diesel. Fluctuations in international oil prices and exchange rates can impact the cost of importing diesel.
Subsidy Removal:
If government subsidies on diesel have been reduced or removed, it could lead to higher prices for consumers as the market adjusts to the true cost of production.
Infrastructure and Distribution Challenges:
Nigeria’s transportation and distribution infrastructure may face challenges, leading to increased transportation costs, which can contribute to higher prices.
Taxation and Regulations: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses
Government taxes, levies, and regulatory policies can impact the final price of diesel, especially if they are increased or changed.
Global Oil Market Dynamics:
Nigeria’s diesel prices can be influenced by global supply and demand factors, geopolitical events, and OPEC decisions, among others.
For the most accurate and up-to-date information on diesel prices in Nigeria and their trends, I recommend checking with local government sources, petroleum regulatory agencies, or reputable financial news sources. If you have any other questions or need information on a different topic, feel free to ask!
Read Also: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
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Summing Up: Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
In conclusion, the recent surge in diesel prices to N950 per liter has sent shockwaves through the manufacturing sector, triggering legitimate concerns of potential shutdowns and subsequent job losses. The implications of such a drastic cost increase extend beyond the immediate financial strain on manufacturers, touching on the broader economy and workforce stability. This is about the Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses.
As stakeholders across industries grapple with these challenges, collaborative efforts between government entities, businesses, and labor groups become paramount in navigating these uncertain times. Swift action and innovative solutions are imperative to safeguard both the viability of businesses and the livelihoods of countless employees who depend on a thriving manufacturing sector. Thanks for reading through Diesel price hits N950 Per liter – manufacturers fear shutdowns & job losses. Maximize your experience by bookmarking, following, liking, and sharing.
