The cost of diesel per litre is expected to increase from N800 to N1,500 within the next two weeks.

This was disclosed by the Natural Oil and Gas Suppliers Association (NOGASA) on Tuesday during a media briefing in Abuja.

According to them, the cost of diesel will hit the roof if nothing drastic was done to curtail the current challenge faced by importers of the deregulated commodity.

The National President, NOGASA, Bennett Korie, said, “If you go round now you will see that about 75% of filling stations in Nigeria have gone out of business. There is no diesel to take fuel to their stations. All of them are going down.

“And it is not that the fuel is not there, but the cost of bringing it to the stations is too high. We know that the crisis between Ukraine and Russia has contributed badly, but the government has to do something fast, otherwise we are going to buy diesel in the next two weeks at N1000 to N1500/litre.”

He added that this was also the reason why petrol scarcity had failed to abate in Abuja and neighbouring Nasarawa and Niger states, among others.

“As far as I am concerned, nothing for now. The only way out, if you want to know, is that they (the government) should increase the price of fuel a little to reduce the money spent on PMS subsidy.

“I know Nigerians will not be happy to hear this, but this is the only solution. They should increase the price of fuel a little so that the savings will enable the Central Bank of Nigeria to have enough foreign exchange.

“You and I know that we import everything now in Nigeria. Diesel is an imported product and it is fully deregulated. So the importers are not getting dollars at the official CBN rate to import diesel. Everybody is going to the black market to get dollars to import their products and so you expect the price of diesel to be high,” he added.

According to Korie, if the government could bring down the rate at which it spends foreign exchange on PMS imports, this would help other businessmen who import diesel to bring in products at low prices.

He said, “The price is N850/litre and you are giving your driver 1,200 litres from Lagos to Abuja, if you do the calculation you will find out that the landing cost (for transporting the fuel) is about N40/litre.

“So if you add that to PMS, buying at the depot price and selling here, it is too high. So if your cost of bringing it in is at N40/litre and you bought it at N155/litre, when you add this you will get N195/litre. But you are to sell at N165/litre. So who will do that kind of business? It is already a loss-making business.”

Russell Hardy, head of Oil Trader, Vitol warned that “Europe imports about half of its diesel from Russia and about half of its diesel from the Middle East,” adding that systemic shortfall of diesel is there as Russian imports account for roughly 15% of Europe’s diesel consumption, and crude oil from Russia processed in Europe.

“The shift to more diesel consumption over petrol in Europe had created shortages of the fuel,” he stated, warning that refineries could boost their diesel output in response to higher prices at the expense of other oil-derived products to shore up supply.