Why Price Of diesel, Aviation Fuel Is Rising – Oil Marketers

Why Price Of diesel, Aviation Fuel Is Rising – Oil Marketers

Oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN), has attributed the recent surge in Automotive Gas Oil (AGO), otherwise known as diesel and Jet A1 (Aviation fuel) to the difficulty in accessing foreign exchange and the ongoing war between Russia and Ukraine.

This was disclosed by the Executive Secretary of MOMAN, Clement Isong in Lagos, also stating that war between Russia and Ukraine has led to an increase in global crude oil prices.

Isong pointed out that the attack on Ukraine by Russia had led to an increase in the prices of crude oil and all its derivatives, including diesel and aviation fuel.

He said, “That war that is ongoing has caused crude oil prices to go up worldwide. It has gotten as high as $130 per barrel. The problem simply is, even if you have the money, it is not so easy to find.

“Marketers are finding it difficult to source products and import them to the country. Then, there is the issue of accessing forex, which has been a bit challenging for marketers.

“So, when you add these two things together, you will understand why we are having this problem.’’

Isong who confirmed that major marketers are almost done with the blending of the off-spec petrol, said they have successfully blended out the methanol as it is now on-spec.

He said, “We are almost done with the blending of the off-spec petrol. For the majority of MOMAN members, we have almost finished the blending. We have successfully blended out the methanol and it is now on-spec.’’

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He noted that the lingering petrol scarcity was due to supply gaps which were triggered by the withdrawal of the off-spec petrol from the market, but had been compounded by other factors such as availability of the product in the international market and the high cost of diesel, which have made transportation of petroleum products expensive for marketers.

He said: “There are other factors that come into play. So, to solve the problem, you need to supply about 150 per cent of your usual supply to the country for the queues to disappear.

Recall that major cities across the country have been faced with severe fuel scarcity due to the withdrawal of imported petrol from the market, creating a supply gap that appears to have persisted.

The product was said to have contained methanol above the specified volume for Nigeria.

The federal government had set up a technical committee of stakeholders in the downstream petroleum sector, to carry out the blending of the off-spec petrol, to comply with the acceptable standard.