Diesel prices in Nigeria may see a decline as Russia turns to Africa and some Asian countries offering generous discounts in the face of Western countries boycotting Russian oil to deny Vladimir Putin a means to finance his war against Ukraine.
However, global diesel prices have not been tracked in Nigeria as the diesel market which operates like a cartel, has marketers fixing uniform prices regardless of international conditions.
Analysts say prices would be determined by which market Nigeria buys from. If it agrees to buy from Russia, prices could see a decline but if it buys from Europe which is struggling to meet demands, then prices could surge above N1000. Nigeria imports the bulk of the diesel for its use as the refineries undergo rehabilitation. Diesel is deregulated in the country.
Western countries placed an embargo on Russian crude and refined products February 5, 2023, to starve Moscow of funding for the war against Ukraine which is set to enter its second year this month.
The EU proposal, submitted last week, called for capping the price of Russian diesel sold to third countries at $100 per barrel for premium products and $45 for discount products.
“If Nigeria reverts to buying from other European nations the first implication is higher crude prices, higher diesel cost,” said Jide Pratt, chief operating officer of AIONA. “Also, the rate our exchange is going we might see diesel at levels close to 1000 per litre.”
