Oil marketers revealed on Monday that many states now charge between N900 and N950 per litre for the commodity as a result of the country’s current foreign exchange situation and the recent imposition of a 7.5% value-added tax on automotive petrol oil, also known as diesel.
Local firms have commented that the development may result in the closure of some factories and job losses.
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.
Diesel cost about N650 per litre before the Federal Government imposed a 7.5% VAT on the good, according to Benneth Korie, National President of NOGASA.
The Federal Government started implementing the payment of the 7.5% VAT on diesel from June 20, 2023, according to The PUNCH.
In Abuja, representatives of the Federal Inland Revenue Service and the Nigerian Customs Service had reaffirmed that AGO was not exempt from paying VAT in accordance with the VAT Modification Order 2021.
“Diesel price is now approaching N900 to N950/litre depending on where you are buying it from,” the NOGASA president remarked during the press conference on Monday. Diesel cost about N650 per litre prior to the FIRS’s application of VAT on it.
“The lack of cash is a contributing factor in this price hike. In this dollar situation, the government must step in and take action. To discuss this dollar issue, all bank CEOs, the Central Bank of Nigeria, and others must come together. If it continues in this direction, it will damage a lot of things for us.
Korie also urged President Bola Tinubu to start operating Nigeria’s refineries. When Nigeria’s refineries begin to produce refined goods, he claimed, pressure from marketers and other importers to buy dollars will lessen.
“Humans constructed our refineries, and humans can repair them. I think that rather than relying on imports, Nigerian engineers can repair these refineries. This can’t go on like this.
“By importing petroleum products and other goods, we are placing strain on the nation’s meagre supply of dollars. However, this pressure will significantly decrease once our refineries are operating. He said, “The government needs to fix our refineries.
The head of NOGASA also bemoaned the poor condition of Nigeria’s highways, citing the Port Harcourt-Warri road as an example and highlighting the 500 tankers that were currently stuck there as a result of its appalling condition.
You can’t cross that road; our tankers have been on it for the past two weeks. Our roads are in poor condition, our trucks are stuck on the Warri-Abuja highway for two weeks, and our drivers are abducted and killed while other people suffer.
The roads are partially blocked. Petroleum products won’t be able to reach Abuja and other areas of the nation if the government does not repair those roads, according to Korie.
producers bemoan price increase
In response to the situation, the Director-General of the Nigerian Textile Manufacturers Association, Hamma Kwajaffa, stated that a number of textile producers were considering closing down their businesses due to increased prices, which were primarily brought on by skyrocketing energy costs.
The DG said that textile producers couldn’t afford to purchase diesel at the anticipated price of _.
Many are thinking about closing for the moment, he said. We are unable to raise that level of money. Less than 24 textiles are available today, and those who are working are thinking of quitting. They are up against the wall. These companies are not involved in charity. They must achieve a profit.
George Onafowokan, the chief executive officer of Coleman Technical Industries Limited, stated in a similar vein that rising diesel prices will result in higher manufacturing costs for the business.
He encouraged the government to develop long-term remedies for the ongoing rise in diesel prices.
Every time the price of diesel increases, everyone’s costs increase, according to Onafowokan. If diesel sells at N950, logistics expenses will increase for everyone, as well as power bills.
Everyone of us is experiencing a crisis. Sincerely, the government needs to do better not only in providing palliatives to the people but also for the businesses that are employing them, especially manufacturers. For the majority of Nigerian businesses, especially manufacturers, we are taking hits day in and day out.
