Nigeria’s poor refining capacity affecting price, availability of diesel – Expert

The General Manager said since the nation’s capacity to refine is poor, it relies mostly on importation of the product and with the present exchange rate of over N600 to the dollar, the price will definitely increase.

 

Mr Uche Odigbo, General Manager, Samon Petroleum Limited, Calabar Depot, on Friday said that Nigeria’s poor refining capacity is affecting the price and availability of diesel in the nation.
Odigbo said this in an interview with the News Agency of Nigeria (NAN) in Calabar, while reacting to the high cost and scarcity of the product in many filling stations in Cross River.
NAN reports that diesel is now a scarce and expensive commodity in Cross River as it is always not available in major filling stations, while those that have it sell for as high as N800 per litre.
The General Manager said since the nation’s capacity to refine is poor, it relies mostly on importation of the product and with the present exchange rate of over N600 to the dollar, the price will definitely increase.
“It is important to note that diesel is a deregulated product meaning that government does not get involved in the supply chain unlike the Premium Motor Spirit (PMS) where government gets involved to stabilise the price.
“Also, it is not on the Central Bank of Nigeria’s (CBN), list of items that you can approach the Federal Government for foreign exchange, meaning importers have to rely on the black market.
“So, whatever the foreign exchange market does affects the diesel supply chain.
“There is also the fact that since it is a deregulated product, as the worldwide price of crude oil goes up, the cost of purchasing diesel abroad goes up.
“In the past few months, the price has risen from US$70 per barrel to over US$100 per barrel,” he said.
Odigbo maintained that he does not believe that diesel is being hoarded by filling stations because everyone is in business to make money and hoarding a petroleum product that evaporates in your facility is not wise.
He said the product is scarce because the present demand is extremely high following the several collapse of the National electricity Grid in 2022 alone.
“Hotels, manufacturing companies, banks, malls, hospitals, schools and others all depend on diesel in large quantities.
“This means that whenever public power supply reduces, the quantity of diesel needed nationwide increases causing scarcity,” he asserted.
Similarly, a procurement Manager in one of the hotels in Calabar who does not want his name mentioned said it is difficult to get diesel in filling stations in the city, even though it is sold for about N800 per litre.
He said because of the difficulty, they now resort to working with agents who supply them directly.
He added that the Federal Government should look into the matter because he thinks the product is being smuggled to neighboring countries where it is sold on higher rates.

 

(NAN)
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