Following the fluctuations in forex and international crude oil prices, the ex-depot price of diesel has dropped by over 30 per cent between February and June 2017.
As a deregulated product, the price of diesel is controlled by the market forces of demand and supply, unlike petrol, which has a price cap.
The international market price of crude above $53 in February, the prices of refined products were also high as the ex-depot price of diesel was between N225 per litre and N235.
The situation, it was gathered, was worsened by the high exchange rate at the period, which also impacted on the landing cost of products.
For instance, during the first week of February, the depots in Lagos were selling diesel above N235 per litre, while the pump price at filling stations were as high as N260 – N280 per litre.
While some were selling at N231, N230, 235, 227, 225, and N226, others were selling above N235 at the depots.
However, at the beginning of June, the depots were selling between N152 and N154 per litre.
According to market survey, the marketers were selling diesel at N152, 153 and N154, while the pump price was below N200 per litre at the beginning of June.
The price of diesel dropped further at the weekend with depots in Lagos selling at N155, 149, 147, 145, 144, and 144.50.
A marketer, who spoke on the situation, said the development was cyclic as a result of changing prices at the international and forex fluctuations.
“The price of crude and exchange rate in February were on the high side and they impacted not only on the price of diesel but all other products. Nigerians did not feel the impact on petrol because of the price cap. With the drop in price of crude below $50 per barrel, the country is not seeing the benefits of liberalisation on diesel,” he said.
Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Akin Akinfemiwa had told downstream operators in Lagos recently that the country was reaping the benefits of diesel and called on the federal government to remove the cap on the price of petrol.
“Without that, we will not realise the potential of this $5 billion revenue in the sector,” Akinfemiwa said.
The Chairman of Depots and Petroleum Products Marketers Association (DAPPMA), Mr. Dapo Abiodun, had also made similar call, saying that it was not by choice that the marketers allowed NNPC to currently import 95 per cent of petrol.
Abiodun, who is also the Chief Executive Officer of Heyden Petroleum Limited, said in addition to paying the marketers’ outstanding $2 billion claims arising from the old subsidy regime, the permanent solution was to remove the cap on the pump price of petrol and fully liberalise the downstream sector.