Oil marketers claimed on Monday that the recent imposition of a 7.5% value-added tax on automotive petrol oil, often known as diesel, and the ongoing foreign exchange crisis in Nigeria had increased the price of the commodity to between N900 and N950/litre in numerous states.
Local firms have responded to the development by warning that it could result in the closure of some factories and the loss of jobs.
The marketers claimed that their difficulty to obtain US dollars was preventing them from importing diesel during a press briefing held in Abuja under the auspices of the Natural Oil and Gas Suppliers Association of Nigeria.
JUST IN: See The New Price Of Diesel As Marketers Increase Price
Prior to the Federal Budget, according to Benneth Korie, National President of NOGASA, the price of fuel was approximately N650 per litre before the Federal Government introduced a 7.5 per cent VAT on the commodity.
The Federal Government began implementing the payment of the 7.5% VAT on diesel on June 20, 2023, according to print media.
This had been confirmed in Abuja by representatives of the Federal Inland Revenue Service and the Nigerian Customs Service, who also emphasised that the VAT Modification Order 2021 did not exclude AGO from paying VAT.
The NOGASA president stated, “Diesel price is now approaching N900 to N950/litre depending on where you are buying it from.” during the press conference on Monday. Diesel was roughly N650/litre before the FIRS implemented VAT on it.
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“This increase in price is also due to the scarcity of the dollars. The government has to intervene in this dollar situation. All bank CEOs, 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.”
Additionally, Korie urged President Bola Tinubu to restart Nigeria’s refineries. He claimed that once Nigeria’s refineries begin to produce refined goods, the pressure from marketers and other importers on dollars will diminish.
“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 pilling 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 has to fix our refineries,” he stated.
Diesel Prices May Reach N1,500 Per Litre, With 75% Of Filling Stations Closed–Marketers
The NOGASA president also lamented the poor condition of Nigeria’s highways. Citing the Port Harcourt-Warri road as an example, he emphasised that 500 tankers were currently stuck there because of the road’s appalling condition.
“For two weeks now our tankers have been on that road; you can’t cross it. Our roads are bad, our trucks trapped on the Warri-Abuja road for two weeks, our drivers are kidnapped, killes, 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,” Korie stated.
Hamma Kwajaffa, the director general of the Nigerian Textile Manufacturers Association, responded to the development by saying that numerous textile producers were considering closing down their businesses due to growing costs, which were mostly brought on by skyrocketing energy prices.
Diesel Prices May Reach N1,500 Per Litre, With 75% Of Filling Stations Closed–Marketers
According to the DG, textile companies could not afford to purchase fuel at the anticipated price of _.
He said, “Many are contemplating closing for now. We can’t meet up with that kind of amount. We have less than 24 textiles today, those who are working are contemplating closure. They have been pushed to the wall. These businesses are not in charity. They have to break even.
In a similar vein, George Onafowokan, the chief executive officer of Coleman Technical Industries Limited, stated that rising diesel prices suggested rising manufacturing costs for the business.
He pleaded with the administration to come up with long-term fixes for the rising expense of diesel.
Onafowokan said, “Whenever the price of diesel goes up, it makes everybody’s cost go up. Logistics costs will go up for everybody, power costs will go up if diesel sells at N950.
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“We are all in crisis. For most businesses in Nigeria, especially manufacturers, we are taking hits day in day out and sincerely, the government needs to do better not only in giving palliatives to the people, but for the businesses that are employing them, especially manufacturers.”
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