Fuel marketers in Nigeria anticipate a further reduction in diesel prices, possibly to around N700 per liter, following a recent price cut by the Dangote refinery. Hammed Fashola, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed this outlook, noting the positive impact of a stronger naira against the dollar on fuel costs.
Fashola commended the Dangote refinery for lowering the diesel price from above N1,200 to N1,000. He emphasized that the local production of diesel eliminates many costs associated with imports, such as shipping and customs duties, which should ideally lead to lower prices.
"We are hopeful that diesel prices will drop to about N700 per liter, which would be beneficial for everyone," Fashola remarked in a recent interview. He highlighted the differences between locally produced and imported diesel, expecting that the former would be significantly cheaper.
The Dangote refinery's initiative began approximately two weeks ago, reducing diesel prices from N1,600 per liter to N1,250 per liter. This price cut has been well received by economists and business analysts alike, noting its potential to decrease production costs and subsequently consumer prices.
Economist Femi Oladele expressed enthusiasm about the price reduction, predicting it would lead to lower production costs, encourage the resurgence and creation of businesses, and help conserve foreign exchange, potentially boosting the country's reserves.
Furthermore, Jonathan Thomas, an analyst at Sankore Investment Limited, discussed how diesel costs influence the overall economy. "Diesel powers many factories and heavy vehicles, playing a crucial role in the production and transportation of goods. A reduction in diesel prices is expected to lower production costs significantly, impacting the price levels of goods and services across the board," he explained.
Both experts agree that if the trend of price cuts continues, it could stimulate economic activity and contribute to a decrease in inflation, marking a positive shift in the nation's economic landscape.
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