By Ayomde Otitoju
The Dangote Petroleum Refinery has increased the price of Automotive Gas Oil (AGO), commonly known as diesel, by ₦100 per litre, raising its gantry price from ₦1,570 to ₦1,670 per litre.
The new price takes effect from midnight on Friday, August 21, representing a 6.4 per cent increase.
The adjustment comes after the refinery maintained its diesel price at a lower level in recent weeks, providing some relief to businesses and consumers that rely heavily on the product.
At ₦1,670 per litre, the new Dangote price is ₦21 higher than the current landing cost of imported diesel, estimated at ₦1,649 per litre.
However, the refinery’s new rate remains below prices quoted by several Lagos-based depots. As of August 20, some depots, including African Terminal, Integrated, Duport, Ibachem, Gulf Treasure and Pivot, were reportedly selling diesel at about ₦1,700 per litre.
The increase could add to operating costs for manufacturers, logistics companies, transport operators and other businesses that depend on diesel for power generation and transportation.
Diesel remains a major source of backup power for businesses and facilities affected by unreliable electricity supply. A ₦100 per litre increase could therefore significantly raise costs for companies that consume large volumes of the product.
Businesses may eventually pass higher energy and transportation costs on to consumers through increased prices for goods and services, although the extent of the impact will depend on market conditions, distribution expenses and marketers’ pricing decisions.
The latest adjustment also comes amid volatility in international oil markets, with Brent crude recently trading above $93 per barrel. Geopolitical tensions and concerns over the strategic Strait of Hormuz have contributed to movements in global crude prices.
Sustained increases in international oil prices could place further pressure on domestic petroleum product prices as refiners and marketers adjust to changes in input and replacement costs.
