NACCIMA, NASMEs, NESG Worry as Diesel Hits N290 Per Litre…

There was palpable fear among members of the organised private sector yesterday over a spike in the price of Automotive Gas Oil, also known as diesel, which hit an all-time high of N290 per litre this week as against N280 per litre last week.

Consequently, the Nigeria Employers’ Consultative Association (NECA), the Nigeria Economic Summit Group (NESG), the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), and the National Association of Small and Medium Enterprises (NASMEs) raised the alarm that the new price regime might trigger a corresponding increase in prices of goods and services, as most companies in Nigeria rely on diesel to power their factories.

The OPS feared that the price increase, believed to have been precipitated by the rise in the price of crude oil, with Brent crude selling for $75.31 per barrel at the international market yesterday, would compel its members to transfer the burden of the new price to Nigerian consumers.

The Director-General of the NECA, Mr. Timothy Olawale, told THISDAY that the association believed that only the “provision of energy at a reliable and affordable price to industries will reduce the demand for diesel, while improving the infrastructural provision of rail for easy movement of goods and persons at a cheaper price will reduce the burden on businesses and further reduce the inflationary rate.

Olawale said: “Ordinarily, the burden will be shifted down to the consumers, whose purchasing power has been eroded with the rising inflationary trend, while more and more people would enter into the poverty margin.”

Olawale said with the total deregulation of prices of diesel, “it behooves that as prices of crude oil increases or decreases globally, there should be a consequential change in its prices nationally. “Currently, the price of Brent crude is $75.57, therefore the price should necessarily increase and can even be exasperated as the current crisis between Saudi Arabia and the United Arab Emirates escalates the global price.”

He added that the impact of the surge in diesel price would be grave on manufacturers and other economic actors in the banking, telecommunication, and transportation sectors “as the country is one of the world’s largest economies where businesses rely so heavily on diesel-powered generators.