The Independent Petroleum Marketers Association of Nigeria (IPMAN), has blamed diesel scarcity on the recent clampdown on illegal refineries in the country.
According to the association, the illegal oil facilities were producing diesel in manageable volumes for the market, which reduced the cost of locally produced diesel when compared to the imported product.
BizWatch Nigeria understands that as of Friday, March 11, 2022, a litre of diesel was sold for N655.
Speaking on the development, the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu revealed that the reason for the high cost of diesel was because the commodity was no more refined in manageable volumes in Nigeria.
His words: “Diesel, kerosene, and aviation fuel have been deregulated for a long time and since then the products are imported into the country. And in as much as there is importation, the landing cost is being influenced by the foreign exchange rate.
“Based on the freight, vessel rate, product cost, and forex, diesel should be sold in Nigeria at between N500 to N600 per litre. But because there was local refining of diesel by some illegal refiners who were involved in bunkering, they were able to refine diesel locally and sold it at between N200 to N300 per litre.
“This made diesel not be lucrative for those who were importing the product because they will sell at a loss. And most companies and individual houses were finding a way to use the locally refined diesel.
“But when the Federal Government declared war on illegal refineries in conjunction with the governor of Rivers State and some other governors, they slowed down the production of locally refined diesel. So most diesel users we left with no choice but to buy the imported ones.
“So what is happening now is that the demand for imported diesel is becoming heavier and importation has been less due to the rising price of crude oil and the instability of forex.”
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