Dangote Refinery has announced an increase in the price of Automotive Gas Oil (diesel) from N940 per litre to N1,100 per litre.

This significant adjustment in pricing reflects the refinery’s efforts to mitigate the impact of currency depreciation on its operations.

The decision to raise the price of diesel comes amidst ongoing challenges in the foreign exchange market, with the naira experiencing a downward spiral against the dollar in recent weeks.

The refinery cited the unfavorable exchange rate as the primary driver behind the price hike, signaling the intricacies of operating in a volatile economic environment.

It is worth noting that just a few weeks ago, on April 24, 2024, Dangote Refinery had announced a reduction in the prices of diesel and aviation fuel to N940 per litre and N980 per litre, respectively.

This move was aimed at responding to calls from oil marketers for a reduction in diesel prices, demonstrating the refinery’s willingness to adapt to market dynamics.

However, the recent depreciation of the naira has necessitated a reversal of this downward trend, prompting Dangote Refinery to adjust its pricing strategy accordingly.

Some dealers reported purchasing diesel from the plant at even higher rates, reaching up to N1,200 per litre for those procuring lesser volumes.

Abubakar Maigandi, the National President of the Independent Petroleum Marketers Association of Nigeria, attributed the price increase to the rising exchange rate, as communicated by the refinery.

He emphasized the direct correlation between currency fluctuations and the cost of imported commodities, such as crude oil, which forms the basis for diesel production.

While officials of the refinery have remained tight-lipped on the matter, industry sources and major marketers have corroborated reports of the price adjustment.

Chief Ukadike Chinedu, the National Public Relations Officer of IPMAN, echoed similar sentiments, highlighting the adverse impact of the naira’s depreciation on refined product prices.

The recent fluctuations in the naira-dollar exchange rate underscore the challenges facing Nigeria’s economy, with implications for various sectors, including energy and transportation.

Despite initial signs of stability earlier in the year, the naira’s recent depreciation has reignited concerns about inflationary pressures and economic uncertainty.

NNPC Exploration and Production Limited (NNPC E&P Ltd) and Natural Oilfield Services Limited (NOSL) have commenced oil production at Oil Mining Lease 13 (OML 13) located in Akwa Ibom State.

The announcement came through a statement signed by Olufemi Soneye, the spokesperson of NNPC E&P Ltd, highlighting the collaborative effort between the flagship upstream subsidiary of the Nigerian National Petroleum Corporation (NNPC) and NOSL, a subsidiary of Sterling Oil Exploration & Energy Production Company Limited.

The production, which officially began on May 6, 2024, saw an initial output of 6,000 barrels of oil. The partners aim to ramp up production to 40,000 barrels per day by May 27, 2024, reflecting their commitment to enhancing Nigeria’s crude oil production capacity.

Soneye said the first oil flow from OML 13 shows the dedication of NNPC E&P Ltd and NOSL to drive growth and development in Nigeria’s oil and gas sector.

He stated, “The achievement does not only signify the culmination of rigorous planning and execution by the teams involved but also represents a new era of economic empowerment and development opportunities for the host communities.”

For Nigeria, the commencement of oil production at OML 13 holds immense significance. It contributes to the country’s efforts to increase its oil production capacity, essential for meeting domestic energy needs and driving economic growth.

Moreover, Soneye reiterated NNPC E&P Ltd and NOSL’s commitment to operating in a safe, environmentally responsible, and community-beneficial manner.

This partnership underscores their dedication to sustainable practices and fostering positive impacts in the local communities where they operate.

The commencement of oil production at OML 13 marks a pivotal moment in Nigeria’s oil and gas industry, signifying not only increased production capacity but also the collaborative efforts between industry players to drive growth and development in the nation’s vital energy sector.

In the first three months of 2024, some of Nigeria’s major manufacturers found themselves navigating treacherous waters as financial losses mounted amidst economic turbulence.

According to data compiled by BusinessDay, rising interest rates and a further devaluation of the naira contributed to the woes of these industrial giants.

The latest financial reports from 13 listed consumer goods firms paint a grim picture, with seven of them collectively recording a staggering loss of N388.6 billion in Q1.

Names such as International Breweries Plc, Cadbury Nigeria Plc, and Nigerian Breweries Plc were among those that bore the brunt of the downturn.

On the flip side, a few companies managed to buck the trend. BUA Foods Plc, Unilever Nigeria Plc, and Dangote Cement Plc reported a combined profit of N171.9 billion, showcasing resilience amidst the challenging economic landscape.

While the overall revenue of these manufacturers saw an impressive 79 percent increase to N2.27 trillion, it was overshadowed by soaring financing costs.

In Q1 alone, finance costs skyrocketed to N616.5 billion from N65.8 billion in the same period in 2023.

Analysts attribute these mounting losses to the confluence of factors, including the devaluation of the naira and escalating interest rates. With the naira experiencing nearly a 30 percent devaluation this year alone, coupled with a 40 percent devaluation last June, companies faced intensified pressure on their margins.

Moreover, the Central Bank of Nigeria’s decision to raise the monetary policy rate to 24.75 percent in March further exacerbated the situation.

This marked the second consecutive increase, following a 400 basis points hike in February, aimed at curbing inflation.

The adverse effects of these economic headwinds were felt across various sectors. Nestle reported the highest finance cost of N218.8 billion, followed closely by Dangote Cement and Dangote Sugar Refinery.

Commenting on the challenging business environment, Uaboi Agbebaku, the company secretary at Nigerian Breweries, highlighted how increased interest rates and FX volatility led to a staggering 391 percent rise in net losses compared to the same quarter in 2023.

Looking ahead, manufacturers remain cautiously optimistic but vigilant. Thabo Mabe, managing director at NASCON, emphasized the importance of navigating the turbulent waters while executing robust strategies to ensure sustained growth.

As Nigeria grapples with economic uncertainties, the resilience of its manufacturing sector will play a pivotal role in shaping the nation’s economic trajectory.

However, concerted efforts from both the public and private sectors will be needed to steer the industry towards stability and growth.