Manufacturers have decried the high cost of automobile petrol oil (AGO), often known as diesel, which is used to generate electricity for their operations, claiming that the commodity consumes almost 80% of their revenues.
Speaking on the predicament of manufacturers in the face of rising product prices, MAN’s Director General, Segun Ajayi-Kadir, stated that producers should not be blamed for inflating product prices due to their high production costs. However, the recent 29.4 percent drop in diesel prices by Dangote Refinery may have provided some respite to producers.
The refinery now sells the product at a significantly lower price of N1,200 per litre, down 29.4 percent from the prior market price of around N1,700.
Regarding the high cost of energy, Ajayi-Kadir stated: “We have told the government and relevant agencies at various fora of what we want to do to reduce the country’s unfavourable and worsening operating costs. Nigerians should not blame local producers for raising the cost of goods because they are dealing with dire circumstances.
“Did you realise that diesel accounts for 80% of the profit of Nigeria’s surviving manufacturing enterprises at a rate of around N1,700? “Which firm can cope with that enormous price for energy to produce and you won’t expect him to increase it price.”
“Consider the new Customs exchange rate, the new interest rate, the paucity of foreign exchange (FX), the NAFDAC prohibition, and other factors. How do you intend to cope with production and generate a profit?”
Recall that the President of the Dangote Group, Alhaji Aliko Dangote, recently revealed that his refinery is supplying diesel at N1,200, which is lower than the market rate of N1,700, and that the major price reduction will have a good impact on Nigerian inflation.
He replied, “Quite a few prices have gone up. When you go to the market and buy anything that we produce locally, such as flour, you will be charged extra. Why? Because they are paying extremely expensive diesel prices.
Diesel
“Now, in our refinery, we’ve started selling diesel for around N1,200 instead of N1,700, and I’m confident that things will continue to improve significantly as time passes.
“If you look at it now, when you are buying N1,650 or N1,700 for a litre of diesel, and that one has been cut off by almost one-third, you are now paying N1,200 for diesel,” Dangote said in a statement.
Source: Vanguardngr.com
