Crude Oil Price Hike: Subsidy Hits N400, Diesel 625 Amidst Fear of Hyperinflation

The rising prices of crude since the Russia-Ukraine war began, coupled with exchange rate instability in Nigeria, among others, have pushed up the prices of refined petroleum products across the country.

Industry figures seen on Tuesday showed that the cost of Brent, the crude against which Nigeria’s oil is priced, rose above $133/barrel around 6pm Nigerian time. The commodity had traded below $90/barrel before the war in Ukraine started.

Oil marketers told our correspondent that the rise in global crude oil prices had been pushing up the cost of Automotive Gas Oil, popularly called diesel; JetA1, otherwise called aviation fuel; as well as Premium Motor Spirit, also known as petrol.

The position of oil marketers on the impact of crude price hike on refined petroleum products in Nigeria had also been confirmed by the Federal Government through the Minister of State for Petroleum Resources, Chief Timipre Sylva, and the Group Managing Director of the Nigerian National Petroleum Company Limited, Mele Kyari.

Findings on Tuesday showed that diesel sold for between N550 – N625/litre in the few filling stations that dispensed the commodity.

“Unlike PMS, diesel or AGO has been deregulated and the price is basically determined by the cost of crude oil, foreign exchange rate and few other factors,” the President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, stated.

He added, “While diesel is a deregulated commodity, petrol is not deregulated but is rather subsidised and you can imagine the amount of subsidy being spent on a litre of petrol currently.”